COAL CO­NUN­DRUM

Finweek English Edition - - INVESTMENT - Simon Brown si­monb@fin­week.co.za @Si­monPB

Coal min­ing should be a fairly easy busi­ness. The mines are typ­i­cally rather shal­low, and Eskom is one of your main cus­tomers – de­pend­ing on what type of coal you mine. But look­ing at listed ju­nior min­ers such as Keaton En­ergy, SA Coal Min­ing, Forbes Man­hat­tan, Hwange Col­liery and Coal of Africa, it’s a very dif­fi­cult busi­ness. They’ve all seen share prices be­ing bashed over the last year and are all strug­gling to really get their busi­nesses go­ing. Bot­tom line is that while South Africa’s elec­tric­ity gen­er­a­tion is coal dom­i­nated and will re­main so for decades to come, this is not a sec­tor to in­vest in at the moment.

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