JOHANNESBURG (miningweekly.com) - South Africcan power utility Eskom had set up a work group with fellow State-owned enterprise Transnet to interrogate rail logistics solutions as part of a long-term coal-supply strategy for its power stations, chief officer Brian Dames told lawmakers this week. Long-term road and conveyor options were also being pursued.
Currently, only its Majuba facility, in KwaZulu-Natal, had rail-offloading facilities, but work was also under way on a range of other possible developments, including a containerised rail solution for the Camden plant, which was being returned to service.
The utility had, in recent years, been sourcing increasing quantities of coal through short-term contracts from mines that were not tied to its power stations; and trucking the coal has undermined the quality of road surfaces, particularly in the Mpumalanga province where many of the group's power stations are clustered.
Dames said that several long-term rail infrastructure projects were under consideration, including the Camden development and a dedicated rail link to Majuba, which did not source primary energy from an associated colliery.
He indicated that Transnet had its own plans to expand the Mpumalanga rail network and that Eskom would, therefore, only provide capital in instances such as the Majuba heavy haul line and/or in the case of investments into power station offloading facilities.
A Waterberg rail link feasibility study had also been initiated with Transnet and the coal industry, as had an investigation into so-called inland coal consolidation terminals, or "coal pantries".
"Eskom has a comprehensive coal-sourcing strategy in place to reduce the reliance on shorter-term coal supplies, achieve efficient cost-based prices, risk based stock management and reduce the amount and cost of coal transportation," Dames said during a presentation to the public enterprises portfolio committee meeting in Cape Town.
Some 74% of Eskom's coal was transported over conveyors from tied collieries, but road transport currently accounted for 22% of the coal it consumed and rail only 4%.
Dames warned that transport distances had increased, which had also increased the complexity of the coal-supply network and the requirement for more coal stocks - stocks currently stood at 36 days, a dramatic improvement on the 13-day levels during the crisis of January 2008.
He also insisted that there was a need for major reinvestment by mining companies into the tied collieries as well as for the development of new mines to supply new stations and to augment and replace existing supplies.
South Africa's total thermal coal demand was expected to rise by 17% by 2018, with Eskom's offtake to be around 141-million tons by that date.