Eskom coal stockpile now stands at 36 days

• 14 years ago (2010-02-01)
• David Flin

Africa 303 North America 998

---

According to Brian Dames, Head of Power Generation for Eskom, the South African utility has built up its coal stockpile to an average of 36 days, and plans to achieve its 42 day target before the Soccer World Cup and the onset of winter.

A shortage of coal contributed to the electricity blackouts of 2008. Concern about this happening again prompted the South African Parliamentary public enterprises committee to call Eskom and leading coal suppliers to brief it about the security of supply. Committee Chairwoman Vytjie Mentor said that the economic upturn has already seen a year-on-year electricity usage growth of 9 per cent in January. This highlighted the need to ensure security of coal supply.

Dames said that Eskom had a comprehensive coal-sourcing strategy to reduce reliance on shorter term supplies, achieve efficient cost-based prices, apply risk-based stock management, and reduce the amount and cost of transporting coal. But rising costs and the disparity between the returns from domestic coal sales and exports added to the difficulty of obtaining coal. Dames stressed that large private sector investments in coal mining were urgently required to recapitalise existing mines and develop new ones to meet Eskom’s future requirements. There had been little new investment in coal production over the past three years. This and the tight reserve margin had forced Eskom to obtain its supply from short-term resources. Dames estimated that the industry would need $13.2 billion of investment in new mines. This would alleviate another big problem facing Eskom: the declining quality of coal extracted from the old mines.