Eskom hasn’t lined up enough coal to power SA beyond 2016

Eskom hasn’t lined up enough coal supplies to meet the needs of generation beyond 2016.

Demand for the fuel from Eskom’s power stations in Mpumalanga will be 17 million metric tons higher than the supplies it has so far contracted with coal companies, Minister of Public Enterprises Lynne Brown said Wednesday in an e-mailed reply to queries from lawmakers.

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“The available Eskom-grade coal in Mpumalanga exceeds 5,000 tons,” Brown said, adding that it’s enough to meet demand. “The coal is available in Mpumalanga. That requires investments and Eskom is in discussion with relevant parties.”

Eskom relies on burning coal for four-fifths of the electricity it generates. The company is battling to meet demand after delays in building new power stations as its aging plants suffer from breakdowns.

Coal producers including Glencore Plc and Anglo American Plc are scaling back output or selling stakes in mines amid a slump in the price of the fuel in the past year.

Eskom has so far contracted 899 million tons for delivery from 2016 to 2030, Brown said. Some supply contracts need to be renegotiated, company spokesman Khulu Phasiwe said.

 — With assistance from Paul Burkhardt in Johannesburg.

- Bloomberg