Eskom could run out of coal in the long term

Wed, 22 June 2011

Johannesburg : South African national power utility Eskom Holdings could run out of supplies of domestic coal in the long term if no infrastructure development takes place along the way.

Making this statement at the Coaltrans SA conference here, Anglo American head of regional strategy Ian Hall said new, largely underdeveloped coal resources in South Africa ‒ the Waterberg, Tuli in Limpopo and the Soutpansberg ‒ needed adequate infrastructure if they were to be tapped. “These are large resources but they are pretty much stranded in terms of infrastructure,” he added.

Hall said that while Eskom generally used 20 megajoules (MJ) of coal, if there was no further investment in the central basin that provided its coal, and no infrastructure linking new sources of coal, Eskom could run out of supplies.

Eskom also sees export of coal as a risk to domestic supply.

Should Eskom change its coal grade or mix of coal used in its power stations, it might call on local producers to supply coal they usually exported,” Hall continued. Exporters could also start exporting lower grade coal depending on the price.

Hall said Eskom had estimated that R100 billion of mine investment was needed before 2020 if it was to meet its supply needs.

But even for the exporters, there was clearly a disconnection between export production, rail and port capacity, said Hall, adding that South Africa needed investment in new corridors.

“The market is there, we have the resources. The question is how do we put it all together to optimise our potential as a region?” he asked. (By ESI-Africa)