‘Desperate’ Eskom burn-tests coal sample

Sue Blaine

ESKOM has begun a 30-day burn test on a 200‚000 tonne coal sample from the Waterberg Joint Venture Partners’ proposed opencast mine — which it is hoped will produce 10-million tonnes a year for an initial 30 years — the venture said on Friday.

Coal-dependent Eskom is desperate for more coal‚ and wants it to be declared a “strategic resource” to secure supplies and force mine operators to process some output locally as its coal-fired power stations‚ which produce almost 90% of South Africa’s electricity‚ require a continuous supply of it. Eskom has struggled to power South Africa’s economy‚ despite sluggish growth‚ since demand exceeded supply in 2008‚ leading to rolling blackouts that cost South Africa more than $50bn.

“Securing coal is an increasing challenge as Eskom’s coal-fired power stations require a continuous supply at fair prices. Eskom has to compete with international buyers for South Africa’s coal reserves‚ which has an effect on the coal price. Increased specifications for the acceptable quality of coal delivered to Eskom also influence supply‚” the utility said in its most recent coal-supply strategy.

The joint venture said it had completed a feasibility study into development of an opencast mining operation in Limpopo‚ the results of which would be kept confidential until it had updated the study and released it as a full bankable feasibility study.

The ASX-listed Waterberg Coal Company said in its JSE prelisting statement last year the project contains 1.8-billion gross tonnes in situ. Eskom said average coal stock levels had improved to 46 days by last March‚ up from 36 days the previous year and it had secured medium-term supply contracts. But it faced uncontracted demand of up to 2‚100-million tonnes to 2051.

It had devised the strategy “in light of … the changing coal supply landscape‚ the consolidation of the supplier market into four main suppliers‚ the export of Eskom-grade coal to India and China‚ the above-inflation cost increases in the mining industry and a lack of new coal mining projects”.

If the burn test is successful‚ Eskom will have gained a boost.

Joint venture director Stephen Miller said discussions between his company and Eskom regarding the terms of a coal-supply agreement were “well advanced”.

Despite South Africa’s pledge to dramatically reduce its emission of greenhouse gases‚ related to climate change‚ Eskom is building the two coal-fired power stations expected to together produce 9‚600MW as part of its R300bn build programme. The utility plans to inject about 20‚000MW of additional capacity into South Africa’s power grid by 2025‚ but its plans have from suffered construction delays. © BDlive 2014

 

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