Coal supplies from those firms who do not supply the country's public electricity provider, Eskom, need to find a home across routes that are limited by the Level 4 lockdown.
This draws attention to the need for international and domestic trade opportunities for coal miners outside of Eskom.
On 29 April 2020, the Government of South Africa published the revised Disaster Management Act ('the Act'), which provides for the phased recovery of the economy and the lifting of the national lock-up.
With the country entering phase 4 as of 1 May 2020, Regulations 11J and 11 K of the Act stipulate that mining activities must be considered an important activity and will be required to resume operations.
Coal miners with active contracts for the supply of Eskom, anomalies aside, can resume operations.
However, those companies which do not supply the utility will resume operations at a reduced capacity of not more than 50%.
In addition to the above, Level 4 involves strict regulations on international exports by sea, land and airport borders.
The export approval is given on a case-by - case basis.
For coal miners who do not supply Eskom, their challenge during this period is to manage how and to whom to sell their reduced coal volumes.
Although larger coal mining companies may have the resources needed to access the current export opportunities under the Disaster Management Regulations, this may be a major challenge for smaller coal mining companies , particularly juniors.
The challenges faced by junior miners in accessing trade finance are nothing new to the industry, and active solutions need to be presented to address them.
Trade opportunities need to be explored through the formation of strategic partnerships with commodity traders that provide opportunities to supply the domestic and international market during this period.
Analysts conclude that the international market for coal is massively oversupplied as a result of the loss in demand for coal at the beginning of the current year.
Japan's nuclear energy has come online, low gas prices compete head-to - head with coal, Indian reserves are complete, and Chinese domestic coal production is ahead of power generation.
According to the Department of Energy, domestically, about 39 per cent of South Africa's coal production is supplied by non-electric power generation industries.
These include the petrochemical, metallurgical, general use and export trade industries, all of which are economically viable industries that can actively contribute to the recovery of the country's economy.
Therefore, instead of concentrating solely on supplying coal for electricity generation, we also need to concentrate on how to increase output from junior coal mining companies to supply other main industries.
For example, critical domestic service providers involved in the manufacture of food, hygiene and health goods also use coal in their manufacturing facilities to generate steam and heat energy.
Navigating this COVID-19 pandemic means that the production of these goods can not afford to be halted: we need to ensure that the delivery of these products takes place at the right time and in the right quality.
In view of the resources needed to power this production, junior miners are presented with an opportunity to supply the coal resources of these industries.
While access to the end-user may be challenging in this regard, Izimbiwa Trading 's operational approach focuses on supporting junior miners in the supply chain.
