Eskom still to decide on fate of Richards Bay coal export allocation

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29 Aug 2008

State-owned Eskom has received several unsolicited offers for its valuable coal export allocation at Richards Bay, but has yet to make a call on how to deal with these offers, spokesperson Fani Zulu said. He told Mining Weekly Online that the coal strategy the utility was busy drafting would determine the fate of this export entitlement, and it was not a given that it would be put up for sale.
The export entitlement that amounted to three-million tons a year, once Richard Bay Coal Terminal’s (RBCT’s) phase five expansion came on line in mid-2009.
Eskom financial director Bongani Nqwababa had said in June that the utility wanted to sell the 50% it held in the South Dunes Coal Terminal – part of RBCT – by the end of 2008.
Since then, Eskom seconded Kumba Iron Ore CE Ras Myburgh, who had worked at its power stations before, as a consultant to assist the utility with a coal supply strategy.
Asked what options the power parastatal was considering for its coal export allocation, Zulu said in a telephone interview that this was not yet clear.
“We still have to come up with what those options are, and that goes back to the coal strategy,” he said. “It’s all about getting the right qualities and quantities of coal into our power stations.”
Zulu could not immediately say when Eskom would finalise its coal strategy.
Coal producers in South Africa that do not have RBCT allocation are keen to get access to it, as export coal prices sit at levels around $150/t, significantly higher than historic prices.
The utility’s coal sources ran down to levels so low in January that Eskom could not generate enough power to supply the country’s demand, leading to a five-day shutdown of the mining sector.
Since then, users are required to cut their power consumption by 10%.

Source: Mining Weekly