Abstract
M.Phil. (Mineral Economics)
The energy crises in the seventies and eighties had led to an awareness in
the world's business community about the profit potential in the energy
mineral supply market. All the sectors in this industry came under
scrutiny, also the coal export sector.
This awareness and rising interest in the world's coal export market caused
amongst others, two major developments :
a) a significant rise in investments in coal exporting ventures
b) a higher expectation by shareholders with respect to capital returns
and future growth
Most companies participated in this expansion campaign, and committed
resources to achieving the higher objectives. The downturn in'the world's
economy , and the resultant diminished demand for energy minerals, caused
the coal export market to come under pressure. The long lead time existing
in the establishment of mining projects, and the fact that mines under
construction cannot be mothballed until times improve, also contributed to
the over-capacity situation that eventuated in the coal export industry
worldwide.
Many companies faced a battle for survival, and participants in the
industry had to re-appraise their long term strategies. Established coal
producing companies had to determine which strategies would best answer
their requirements :
a) whether it be to divest from coal production
b) whether they should diversify their operational base
and many others...