America, Poland, Indonesia, Australia. The world's largest coal-producing nations haven't had much good news lately.
The majority of reports across the coal sector this year have shown mines closing, operations being sold at firesale prices, and profits pinching down to pennies.
But news late last week shows there's one spot bucking that trend.
South Africa. Where output is remaining stubbornly high, even amid the worst depression the global industry has seen in a decade.
Platts reports that South Africa's thermal coal exports in August barely fell as compared to a year ago. With total shipments hitting 5.73 million tonnes, just 5.9 percent lower than exports during August 2014. Related: What Will Happen To Oil Prices When China Fills Its SPR?
In fact, South Africa's coal shipments during the previous month of July were actually at year-high levels. With a total 7.15 tonnes of coal shipped, representing the highest level of exports in seven months.
The incredible thing is, this strong performance is happening even as coal prices are tumbling. The price for South Africa's reference Richards Bay 6,000 kcal/kg coal dropped 4.5 percent during August alone, to $52.60 per tonne at month end.
So what's the South African secret?
For one, the country hosts the world's lowest-cost coal mines. Represented in the chart below (from Platts) by the dark red bars at the far left -- in some cases showing production costs as low as $20 per tonne. Related: Is Russia Plotting To Bring Down OPEC?
South African producers are also benefitting from their proximity to the key market of India. During the first eight months of 2015, 49 percent of South Africa's coal exports shipped here. Related: Six Reasons Natural Gas Prices Are Staying Down
All of which shows that having the right rocks in the right place on Earth can insulate against even the deepest downturns. This should be a case study for all miners looking to outlast their opponents and grab hold of the global markets.
Here's to prime locations,
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