Ian Cockerill, CEO Anglo Coal
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Anglo Coal to get major Eskom supply contract
Brendan Ryan
Posted: Thu, 31 Jul 2008

[miningmx.com] -- ANGLO COAL CEO Ian Cockerill is confident that the group’s New Largo colliery will be chosen to supply Eskom’s “Project Bravo” power station now under construction near Witbank.

That’s despite comments by Eskom spokesman Fani Zulu who told Miningmx on July 10 that, “Anglo Nyosi Coal is one of the contenders to supply Project Bravo but no contract has been signed yet for the coal supply to the power station.”

New Largo is owned by Anglo Nyosi Coal which is a black empowerment JV company set up in February last year in which the Inyosi consortium holds a 27% stake. The two major shareholders in the Inyosi consortium are the Lithemba Consortium and Pamodzi Coal which own 66% between them.

Clearing and terracing work on the site of Project Bravo - which will be a “six pack” station consisting of six 800MW generating sets capable of producing a total of 4,800MW of power - started in April.

Eskom awarded initial contracts worth R31.5bn for Bravo in December last year with Hitachi Power Africa getting the R18.5bn boiler contract and Alstrom S&E the R13bn turbine contract. A “sod turning” ceremony is to be held on the site on Tuesday.

Questioned at today’s presentation of Anglo American’s results for the six months to June, Cockerill commented that, “you can assume New Largo will be the primary supplier of coal to Project Bravo.

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“New Largo is the obvious supplier to the power station and Eskom recognises this as well. However, we are still involved in delicate negotiations around the supply of coal to the station. You can expect announcements in due course.”

Analysts have been quick to seize on Cockerill’s use of the term “primary supplier” because it implies that Eskom is looking to place some of the business with other potential coal suppliers in the area near the town of Ogies, west of Witbank.

When Anglo American announced the creation of Anglo Nyosi Coal last year it stated the New Largo project contained 875Mt of coal reserves and would produce at a rate of 17Mt/year.

That is the volume of coal burned annually by a power station the size of Project Bravo and it means New Largo could supply the station for 50 years.

That should meet Eskom’s usual supply requirements for a contracted “tied” colliery which are that it be able to supply a power station for at least 40 years with some spare capacity on top of that.