CAPE TOWN (miningweekly.com) – The setting up of a mine development fund to finance black emerging coal miners in the development of resources was expected in the next few weeks, Eskom executive Dan Marokane said on Wednesday.
Marokane told the IHS McCloskey South African Coal Exports Conference that State electricity generator Eskom, which buys 130-million tons of the 250-million tons of coal produced in South Africa a year for use in its 13 power stations, was at an advanced stage of establishing the fund with the assistance of development fund institutions (DFIs) and private sector companies.
He also told Mining Weekly Online on the sidelines of the conference, that interest was being shown in Eskom’s request for information (RFI) for coal supply from emerging black miners.
The RFI closes on February 27.
The fund is being established to encourage black emerging coal miners to help Eskom to eliminate the coal supply shortfall that will arise from 2018.
Emerging miners are defined as those with a 50%-plus-one-share black ownership.
Marokane said that Eskom was also taking steps to contain coal costs in order to limit future electricity price increases, including entering into pacts with major coal suppliers to ensure that prices do not rise ahead of Eskom’s assumptions.
On transforming the industry, the RFI had been issued in order to obtain up-to-date information on the status of the different coal assets, which will determine the extent of the financial support required.
Marokane told Mining Weekly Online that the mining development fund would not rely solely on DFIs and that the private sector had also indicated a keenness to take part.
Eskom intends using commercially acceptable levers, in discussion with established industry players, to increase black ownership, as was done with the creation of the highly successful Eyesizwe by Anglo American and BHP Billiton, which eventually grew into the JSE-listed Exxaro.
Eskom’s long-term coal supply requirements of 4 070-million tons to 2051 create significant opportunities for emerging miners to ramp-up their participation in the industry.
Eskom has contracted out 80% of its coal supplies to 2018.