Operational efficiency, cost discipline and environmental stewardship have enabled coal mining company Canyon Coal’s flagship operation – Khanye Colliery, to sustain its performance in 2025 despite challenging market conditions, says Khanye Colliery mine manager Kgotso Mongalo.

South Africa’s coal sector faced significant headwinds in 2025, with global market volatility and geopolitical disruptions weighing on performance.

As a result, coal prices dipped below 2022 levels, when Russia invaded Ukraine, triggering unprecedented price increases, he says.

Nonetheless, Khanye Colliery continues to play a crucial role in Canyon Coal’s strategic vision and, therefore, had to maintain its focus on operational excellence to navigate sector-wide pressures.

“Khanye Colliery reached steady state a few years ago, which then allowed for a strategic focus on efficiencies and planning. Production and processing targets remain at over 200 000 t a month of run-of-mine coal, with the colliery committed to meeting market demand,” he adds.

As part of this efficiency drive, the operation transitioned from a two-shift to a three-shift mining cycle, consequently allowing for operations to continue 24/7.

“By optimising processes and leveraging technology, where applicable, the colliery was able to achieve sustainable growth, as it now aims to weather market pressures,” says Mongalo.

Despite improvements in rail-to-port logistics systems, South Africa’s coal exporters continue to face pressure from low market prices and high operational costs.

“When coal prices were favourable, rail capacity was lacking, and now that logistical constraints are improving, prices have weakened,” adds Mongalo.

He notes that renewable-energy transition policies and campaigns driven by environmental nonprofit groups, especially in European markets, continue to deter coal use, placing added pressure on coal producers.

Canyon Coal predominantly exports to Asian markets, with exported volumes improving slightly in the past year. However, the overall trading environment is still challenging, with Mongalo citing tariffs introduced by US President Donald Trump and geopolitical events as creating unpredictability.

He anticipates continued coal demand in terms of the future outlook, driven by electricity consumption and population growth in emerging economies.

“While some European countries are moving away from coal, demand trends in Asia differ,” he adds.

Mongalo foresees the same for African regions, citing a total volume of 236-million tonnes of coal output for South Africa in 2025 and the direct employment of 97 666 personnel, which he believes indicates the importance of coal’s role in the domestic energy sector and economy.

Logistics Improvements

Mongalo says State-owned rail company Transnet has materially improved its operationality over the past few years, increasing cargo volumes, reducing transit times and improving customer service.

He refers to comments made at this year’s Investing in African Mining Indaba by Minerals Council South Africa CEO Mzila Mthenjane who highlighted that rail tonnages fell by 77-million tonnes, to 149- million tonnes in the five years to 2022, before recovering to 160-million tonnes in 2024, with a further 8-million-tonne increase expected in the year to date, ending in March.

“Coal exports through the Richards Bay Coal Terminal have also shown signs of improvement. Transnet Freight Rail CEO Russell Baatjies indicated at the Investing in African Mining Indaba that coal exports were expected to increase [even more] by 2029.

These developments remain a work in progress, but could create opportunities to increase Khanye’s export capacity,” notes Mongalo.

However, despite some improvements, he says bulk commodity logistics and marketing teams still need to remain flexible to efficiently navigate market fluctuations.

Meanwhile, Canyon Coal’s holding company Menar, has announced the establishment of a train operating company Menar Ports and Rail, which is expected to deliver integrated transport solutions for mineral exporters, with access to major export corridors and terminals, including the Richards Bay Coal Terminal, the Richards Bay Dry Bulk Terminal and the Richards Bay Grindrod Terminal.

Mongalo says Khanye Colliery stands to benefit in this regard, as this may enhance access to global markets, but cautions that vandalism of rail infrastructure and maintenance backlogs continue to pose risks to export growth, despite intensified security measures.

Addressing environmental, social and governance (ESG) considerations, Mongalo notes that Khanye has ESG initiatives in place, including robust environmental management practices and ongoing rehabilitation efforts.

In 2025, the colliery became South Africa’s first coal mine to attain Bettercoal status – an internationally recognised programme promoting responsible practices in the global coal supply chain.

Bettercoal producers such as Khanye undergo comprehensive assessments across the respective ESG pillars.

“By advancing sustainable mining practices, Khanye Colliery is positioning itself to take advantage of future opportunities in the global coal market,” he says.