Most of the coal needed for Kusile ‘secured’ — Eskom
ESKOM had secured 80%-90% of the coal needed for its Kusile power station over its 40-year life, Ayanda Ntshanga, a senior manager in Eskom’s primary energy division, said on Friday. But there was a distinction between “secured” and “signed”, she said at the Fossil Fuel Foundation’s junior coal mining workshop. Anglo American Inyosi Coal’s New Largo mine is expected to be Kusile’s longterm supplier.
ESKOM has secured 80%-90% of the coal needed for the Kusile power station over its 40-year lifespan, Eskom primary energy division senior manager Ayanda Ntshanga said on Friday.
But there was a distinction between “secured” and “signed”, she said at the Fossil Fuel Foundation’s junior coal mining workshop.
Anglo American Inyosi Coal’s New Largo mine is expected to be Kusile’s long-term supplier.
But finalising a supply agreement has been delayed because Anglo Inyosi coal is 73% owned by Anglo American and 27% by black empowerment entities.
This is in line with the mining charter, but Eskom applies the Codes of Good Practice in the Broadbased Black Empowerment Act, which require the black empowerment ownership of its suppliers to be 50% plus one share.
Ms Ntshanga said Eskom bought 80% of its coal from SA’s four biggest coal-mining companies and it had to grow the emerging black mining sector to increase competition.
Eskom and Anglo American’s responses to questions about the progress of the talks at the weekend were similar to statements they made last October and in March.
An Eskom spokesman said negotiations between Eskom and Anglo American Inyosi Coal were at an advanced stage. He reiterated that Universal Coal and the state-owned miner had medium-term contracts to provide up to 5-million tonnes a year, which was enough until New Largo came on line.
Anglo Coal communications manager Moeketsi Mofokeng said negotiations were continuing and empowerment was one of the issues being discussed. He repeated that Anglo Inyosi would be ready to begin construction as soon as the commercial contract was signed.
Ms Ntshanga said Eskom bought about 125-million tonnes of coal a year and expected this level would be required in future. Eskom had contracted 1.37-billion tonnes of the coal it needed over the next 35 years. Another 2.1-billion tonnes was uncontracted and this was where Eskom intended to bring in emerging black miners.
It had identified five main focus areas: coal from the Waterberg; driving changes in the coal supply sector; progressing new coal technologies; advancing black ownership; and partnering with the state-owned mining company.
Discussions with emerging black miners showed their first concern was funding, Ms Ntshanga said.
To address this Eskom was leading a R1bn mining development fund, which would be independent of Eskom but would be influenced by its requirements. Eskom was talking to development funding institutions about their involvement. The fund would have a 15-year horizon and was likely to be launched in the fourth quarter of this year.
Another way to bring in emerging miners was using coal traders, who could assist small miners who have prospecting rights but lack the funding to bring a mine into production. With a trading agreement they could secure the necessary funding.
Eskom also wanted to consolidate smaller mining companies as many had access to small deposits. But there was some resistance to the idea of consolidation.
Eskom was also looking at other “levers” to help emerging black miners. One was to encourage briquetting. There was an estimated 163-million tonnes of coal fines in dumps around Mpumalanga which could be turned into briquettes.