Eskom senior project manager Karabo Rakgolela
Photo by: Creamer Media's Simone Liedtke
MIDDELBURG (miningweekly.com) – State-owned power utility Eskom is in negotiations with mining houses for the proposed development of a cost-plus coal mine, solely for supplying coal to the new Kusile power station, Eskom senior project manager Karabo Rakgolela said on Thursday.
Speaking at the Mining Coal Symposium, in Middelburg, Mpumalanga, he told delegates that Eskom was also signing contracts for the procurement of up to 41-million tonnes of coal for its power stations over the next decade.
These are but two of the utility’s plans of action to reduce the coal supply constraints in South Africa, especially as the country has a projected coal shortfall nearing 1.3-billion tonnes until 2050.
This excluded any investments in cost-plus mines, he added.
To put Kusile’s dire situation into perspective, Rakgolela said Kusile would account for about 14% of the estimated 474-million-tonne coal shortfall until 2030.
Between 2030 and 2050, when the shortfall will be about 859-million tonnes, Kusile will account for about 31% of the shortfall.
Rakgolela said Eskom was working on various initiatives to ensure security of coal supply.
Among these, he said, the utility was considering the extension of contracts with existing cost-plus mines, even though this would mean that Eskom would need to reinvest funds that the cash-strapped utility does not have.
However, Eskom expects this would lower its coal procurement costs.
Additionally, Rakgolela pointed out that Eskom was also dependent on State-owned Transnet Freight Rail transporting more coal by rail, rather than the utility having to rely on transporting coal by road.