electricity
FEARS
over long-term coal supply
ESKOM
Eskom has been implementing a coal supply strategy over the past three years in order to ensure security of supply for its power stations. Eskom faces substantial challenges to secure the long-term coal supplies it requires for existing and new power stations, Chief Commercial Officer Dan Marokane told a coal conference in Cape Town on 2 February 2011.
Most of Eskom’s coal is sourced from Mpumalanga. “However, Mpumalanga does not have sufficient coal to supply Eskom under a 60-year life-of-station scenario and risks to coal supply have increased because of delays in developing major new long-term sources. In addition, strong demand for coal exports, including for these grades of coal which in the past were used only by Eskom, has put upward pressure on domestic coal prices,” said Marokane.
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Historically, lower-grade coal was used for electricity generation at South Africa’s power stations. Eskom now faces the risk of losing even this low-grade coal to countries like China and India. Marokane said Eskom is concerned that these risks will raise the cost of coal and then lead to increases in the cost of electricity, which would have a negative impact on South Africa’s economy.
“Eskom has a portfolio of contracts with each of the suppliers, which meets its requirements of 121,2 million tons per annum for the Eskom system. All coal requirements in excess of these supplied by the longterm agreements are procured through short- to medium-term contracts,” said the South African Minister of Public Enterprises, Mr MKN Gigaba, when questioned by representatives of the Democratic Alliance last year.
“We have choices to make as a country if we want to find the optimal balance between coal exports and domestic energy security. We are concerned that the market on its own may not ensure that balance,” said Marokane.
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From whom is Eskom procuring its coal stock?
25 o in Africa
Anglo Coal South Africa (Pty) Ltd BHP Billiton Energy Coal South Africa (Pty) Ltd Blackwattle Colliery (Pty) Ltd Eyethu Coal (Pty) Ltd Exxaro Coal (Pty) Ltd (Exxaro) Imbabala Coal (Pty) Ltd Ingcambu Investments (Pty) Ltd Kuyasa Mining (Pty) Ltd Liketh Investments (Pty) Ltd Mashala Resources Nu Coal Mining (Pty) Ltd Optimum Coal Mine (Pty) Ltd Shanduka Coal (Pty) Ltd Sudor Coal (Pty) Ltd Umcebo Mining (Pty) Ltd Xtsrata/Zingisa Joint Venture