http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.19Change: -0.04
R/$ = 12.10Change: 0.05
Au 1179.46 $/ozChange: 3.26
Pt 1125.00 $/ozChange: 2.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 20, 2008

Eskom says coal exports threaten security of supply

Back
Eskom CE Jacob Maroga speaks about coal prices (20-05-2008)
 
 
 
Port|Africa|CoAL|Eskom|Export|Mining|Resources|SECURITY|Africa|Energy|Power|Rail
Port|Africa|CoAL|Eskom|Export|Mining|Resources|SECURITY|Africa|Energy|Power|Rail
port|africa-company|coal|eskom|export|mining|resources|security|africa|energy|power|rail
© Reuse this While soaring coal prices were a key driver behind Eskom’s latest and much-debated application to the energy regulator for significant electricity price increases, CE Jacob Maroga said on Tuesday that it “won’t be useful to force” issues on the coal industry.

However, he conceded that having to compete with the export market for South African coal was a threat to Eskom’s security of supply for coal, which it uses to produce over 90% of its power.

Its biggest supplier of the fuel, Exxaro Resources, which said in January that it might start exporting lower-grade coal to India by the end of the year, had not yet started this, spokesperson Trevor Arran said.

In a media briefing at the State-owned entity’s Johannesburg offices, Maroga said that: “Eskom quality coal was coming under pressure as something that is attractive to overseas consumers”.

He acknowledged that there was a debate between industry and government around availability, security of supply, and the price of coal.

“There is a view that, given coal is a strategic resource for energy, we have to do things that maintain the security of supply,” stated Maroga. “It may be a combination of taking resources, pricing mechanisms, but how that will unfold is still in the early stages.”

Government had also said on Tuesday that it was interrogating issues around coal in South Africa.

Department of Minerals and Energy spokesperson Bheki Khumalo said that the Minister had commissioned a study to draft a "coal master plan", which would interrogate the "best way of preserving our national coal resources".

He was quoted in other publications as having said that an option was to limit the export of coal, but denied having said this when Mining Weekly Online approached him for comment. "You can't put the cart before the horse," he said.

Arran also said that government could not simply “close off the export taps”, as miners had contractual obligations to fulfil, including with rail operators, port operators, and with overseas customers.

RESPONSIBLE

Maroga hinted towards a more amicable approach.

“I also think that, within the mining industry there is a recognition that they have to do things that are responsible, and not to threaten security of supply,” he said.

“And I’m confident that discussions that benefit everybody will emerge. I don’t think that it will be useful for things to be forced on parties.”

Arran said that Exxaro was playing its part.

“We are not irresponsible in all of this,” he said in a telephone interview.

He pointed out that the JSE-listed miner had agreed to supply Eskom with 13,5-million tons out of the additional 30-million the parastatal had contracted thus far in its bid to secure an extra 45-million tons of the fuel.

COAL SPEND

Meanwhile, Maroga noted that Eskom had not cut its spending on coal to protect its profits last year, as the National Energy Regulator of South Africa argued in its report released on Monday.

In fact, he said that the power utility had “consistently spent above its budgeted amounts” in the 2006/7 and 2007/8 financial years, and was on track to spend a total of nearly R13-billion above its budget on procuring coal by the end of the current financial year.

One of the contributing factors to Eskom’s ballooning spend on coal was the fact that it had to increasingly look to the spot markets for supply, as it ran its stations harder.

Maroga said that it currently sourced about one-quarter of the fuel on short-term contracts, which led to significantly higher prices.

Arran said that about one-half of the coal that Exxaro sold to Eskom was based on cost-plus contracts.

Ruling African National Congress secretary general Gwede Mantashe on Friday said that more of Eskom’s coal should come from such contracts.


Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
South African mining and energy adviser Ted Blom has raised a litany of concerns about the state of power utility Eskom and has warned of runaway costs and shortfalls in coal and water, as well as rail capacity. Blom was surprised by the recent buoyancy shown by...
State-owned power utility Eskom has warned that it is highly likely that there will be load-shedding this weekend, as, along with its “massive maintenance drive” to improve the performance and reliability of its power generating units ahead of the expected peak...
Oil firm Chevron said on Friday it has offered to supply South Africa's electricity firm Eskom with excess diesel from its Cape Town refinery, to help run some of its generators. Steve Hegarty, the general manager for strategy at the oil major's South African unit...
More
 
 
Latest News
South African mining and energy adviser Ted Blom has raised a litany of concerns about the state of power utility Eskom and has warned of runaway costs and shortfalls in coal and water, as well as rail capacity. Blom was surprised by the recent buoyancy shown by...
JSE-listed Astrapak will sell specialised packaging systems manufacturer Knilam to Mapflex SA for R17.7-million. The proceeds would be used to reduce Astrapak’s current level of gearing.
The last of the 26 mooring units comprising the Port of Ngqura’s automated mooring system (AMS) have arrived at the port and are expected to improve port efficiency and safety, further driving the Transnet National Ports Authority’s (TNPA’s) objective of establishing...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
Sappi Southern Africa CEO Alex Thiel
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96