Pinagare Mogodi, CEO of the Matsapa-A-Botshelo Group (MAB GROUP), reflects on the coal industry, where his company is increasingly making a big impact, and notes the remarkable strides being made by MAB Construction in building communities and creating jobs across a wide variety of projects.
In the global environment where fossil-fuels are under pressure, how do you see the future of coal for South Africa and Africa?
In the short term (five-10 years), the demand for coal may remain relatively stable, especially in regions where coal is a significant part of the energy mix. However, as more countries and industries shift towards cleaner energy sources, the demand for coal is expected to decrease. In terms of economic impact, the coal industry is likely to continue contributing to the economy through employment and revenue.
However, there might be a need for diversification to mitigate the economic impact as the global demand for coal diminishes. Environmental pressures could increase from international entities and environmental organisations to reduce coal usage due to its contribution to greenhouse gas emissions and climate change. This may lead to stricter regulations and scrutiny.
Medium-term future (10-20 years):
- Diversification: It becomes crucial for South Africa and Africa to diversify their energy mix. Investing in and adopting renewable energy sources such as solar, wind and hydroelectric power will be essential for energy security and sustainability.
- Infrastructure development: Countries might need to invest in new infrastructure for renewable energy production and transmission. This could create new job opportunities and stimulate economic growth.
- Global market dynamics: The global market for coal may continue to shrink, affecting export revenues for countries heavily reliant on coal exports. This emphasises the importance of transitioning to alternative energy sources and finding new economic opportunities.
- Environmental regulations: Stricter environmental regulations may be implemented globally, further incentivising the transition away from coal. This could lead to the phasing out of coal-fired power plants and a decrease in coal mining activities.
- Technology: Advances in clean-coal technologies or carbon capture and storage (CCS) could influence the medium-term outlook. If these technologies become economically viable and widely adopted, they could potentially extend the lifespan of the coal industry, albeit with reduced environmental impact.
Do you supply the domestic and export markets?
As MAB GROUP, our primary focus is on exporting high-grade coal to international markets, including countries such as India and China. Our coal portfolio consists of various grades, including RB1, RB2 and RB3. Recognising the significant demand in these markets, we are in the process of expanding our operations by opening offices in India. This strategic move aims to strengthen our presence and better serve our clients in one of our key markets.
Simultaneously, we understand the importance of maintaining a strong presence in the domestic market. To contribute to local energy needs, we are actively exploring partnerships with local power utilities such as Eskom and Kelvin Power Station. By becoming a reliable coal supplier to these entities, we aim to support the domestic energy sector.
Furthermore, MAB GROUP is committed to continuous growth and diversification. We have plans for expanding our operations, including acquiring new mines. These acquisitions are part of our long-term strategy to ensure a sustainable and resilient position in the ever-evolving coal industry.
Our approach encompasses both global and local markets, reflecting our commitment to meeting the diverse needs of our clients and contributing to the energy landscape on a broader scale.
Transnet has been in the news lately regarding roads and ports: has transporting product to port been a problem for MAB, or is most of your coal transported by your own Trucking Department?
In the dynamic world of transportation and logistics, it’s not uncommon for challenges to arise, and Transnet, as a key player, is no exception. While recent headlines may suggest turbulence within the organisation, it’s essential to provide a balanced perspective to our potential clients and stakeholders. The truth is, despite the internal challenges that Transnet is working diligently to address, operations continue to run efficiently. Coal, one of the cornerstones of South Africa’s economy, is still being moved seamlessly, as are countless other commodities.
The media, with its penchant for sensationalism, can sometimes amplify issues beyond proportion. This undue sensationalism may inadvertently create unnecessary panic among potential clients who rely on Transnet’s services.
It’s important to separate fact from fiction. While Transnet acknowledges and is actively addressing internal issues, this should not overshadow the organisation’s overall capability to deliver on its commitments. Challenges are not unique to Transnet; they are part and parcel of any government parastatal or state-owned enterprise. What sets Transnet apart is its determination to resolve these challenges and emerge even stronger. The dedication to improving efficiency, reliability and transparency is an ongoing process and clients can expect to see positive developments in the near future.
At MAB, we have not encountered significant challenges in transporting our coal to ports. While we utilise various transportation methods, including our own Trucking Department, we also engage with Transnet for certain logistics needs.
It’s important to note that we have not experienced any significant disruptions in our operations due to their services. We acknowledge that, like any organisation, Transnet has its challenges, but we also recognize the positive aspects of its operations, including new expansions, government budget allocations, and efforts to repair and enhance infrastructure. We believe in a balanced perspective, understanding that challenges are part of the process of improvement and growth.
As a company, our primary focus is on ensuring the efficient and reliable transportation of our coal products. We have found viable solutions, including utilising our own transportation resources, to navigate any potential challenges. Our commitment to delivering high-quality products to our customers remains unwavering and we remain optimistic about the improvements and developments within the transportation sector, including those led by entities like Transnet.
Please tell us about your Trucking Department, its scope and ambitions.
MAB Trucking, a reliable arm of our operations, handles short-distance transportation from mine to plant and onward to the railway siding. This is where our meticulous rail logistics come into play, orchestrating the journey of our coal to its final destination, which is the ports. We do long distance to Richards Bay where we have sub-contracting trucks under us, and where we create job opportunities for everyone.
What sort of work does MAB Construction do?
MAB GROUP has experienced remarkable growth in the construction field, starting from humble beginnings and expanding due to our commitment to quality assurance in the construction industry. Our construction department has successfully completed a diverse range of projects, including city development, human-settlement initiatives, mega-housing projects and government infrastructure undertakings.
These projects have not only contributed to the physical development of various areas but have also played a crucial role in job creation, reflecting our commitment to both quality construction and socioeconomic impact.
The company is driven and inspired by these values:
- Quality service
- Creative innovation
- Economic development and sustainability
- Integrity and honesty
- Customer orientation
People, communities and the environment
- More than 9 000 community members have benefitted from MAB’s expenditure of more than R72-million on corporate social responsibility projects.
- A total of R89-million was spent with historically disadvantaged South Africans (HDSA) suppliers over a seven-year period, including youth.
- MAB’s involvement as a construction partner in RDP housing projects hasbrought many employment opportunities to communities.
- The majority of water and land rehabilitation targets have been met.
- Between 2016 and 2022, a total of R239-million has been returned to shareholders.