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South African power plants face 17 million tonne coal shortfall.
South Africa’s state power utility Eskom doesn’t not have enough coal in stock to meet its generation needs beyond 2016, Public Enterprises Minister Lynne Brown said Wednesday.
According to Reuters, the 17 million tonne coal shortfall will become obvious this year at Matla, Tutuka and Hendrina power stations, while Kriel and Arnot Power Stations will began suffering in 2016.
South Africa’s depends on coal to generate 85% of its electricity. But Eskom, which supplies 95% of the country’s power needs, is struggling to meet demand after delays in building new power stations and as aging plants experience failures.
Coal miners operating in the country are not making it easier either. Recently Glencore (LON:AAL) and Anglo American (LON:AAL) announced they’d be scaling back output or selling stakes in mines as the price of the fossil fuel has dropped 22% in the past year.
6 Comments
Mike Failla
We have lots. Perhaps we can work out a deal?
JohnR
South Africa is slowly slipping back to Africa.
Rodney Overes
If Eskom pay the right price from the mines and not the inflated double prices they are buying the coal from there own contracted cadres the price at the mine can go up by 30% then the mines will be profitable there will be enough coal and Eskom will save more than 50 % on there coal purchases.
Jboy
Is there a possibility that Eskom will be looking at importation?
Davin Eastley
Ah, but they have an eight-year locked in contract for thermal coal purchases with Universal Coal, from their Kangala mine, at a scale of 1.7 – 2Mtpa, with production profile likely to increase over the next few years!
Dale Mining
There is heaps of gas (LNG) in Mozambique and Angola. Plus South Africa has Uranium and so does Namibia. So what is the problem? With the number of major EPC/EPCM’s in country and in Mozambique/Angola there is plenty of know how not to just rely on coal.