Eskom coal stockpile now stands at 36 days

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jan 2010

Eskom had built up its coal stockpile to an average of 36 days and planned to achieve its 42- day target before the Soccer World Cup and the onset of winter, the utility’s head of power generation, Brian Dames, said yesterday. A shortage of coal contributed to the electricity blackouts of 2008. Concern about this happening again prompted Parliament’s public enterprises committee to call Eskom and leading coal suppliers to brief it about the security of supply.
The economic upturn has already seen year-on-year electricity usage growth of 9% so far in January. This highlighted the need to ensure security of coal supply, committee chairwoman Vytjie Mentor said.
Dames said 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.
Last year Eskom consumed 129- million tons of thermal coal; it is forecast this will rise to 141-million tons by 2018.
Dames estimated the industry would need R100bn of investment in new mines. This would alleviate another big problem facing Eskom — the declining quality of coal extracted from the old mines.

Source: Business Day