Abstract
This paper investigates the implications for coal supply security for the domestic South African market when faced with weaker export demand. It expands on a previously introduced model of domestic coal trade, DOTRAMOD, by accounting for mining profit, the opening of new mines and the closing of loss-making mines. The results indicate that declining demand for exported coal would result in declining profits for multi-product mines. This would lead to the closure of some mines and reduced coal supply to domestic power producers. These results highlight the importance of the mine investment problem in commodity market studies.
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