[miningmx.com] — ESKOM CEO Brian Dames has reiterated the power utility’s call for urgent coal export restrictions, suggesting a formula-based export-quota for miners.
“This (the regulation of coal exports) should actually already have been introduced,” Dames said in an interview on Thursday. He said Eskom was losing between 500 MW and 1,000 MW per day due to poor quality coal-supplies to power stations.
Two power stations in particular, Duvha and Matla, are struggling to obtain the right quality of coal, said Dames, where Eskom was sometimes forced to mix waiste coal with higher quality coal.
The likeliest way of regulation would be to determine an export ratio, which would force coal producers to supply Eskom with two tonnes of coal, for example, for every one tonne exported.
According to Dames, this is the usual form of regulation in countries where exports are restricted.
Dames however acknowledged that miners’ ability to export is vital to Eskom and other industries.
“We need capital expenditure on new mines to keep our power stations on the go. Our coal producers don’t have capital for that – the only way they can get it is by exporting. However, we must find the right balance with this,’ Dames said.
Last week, export prices of coal rose to $140 per tonne from $110 per tonne at Christmas as a result of the flooding of coal mines in Australia.
Predictions at the end of last year were that coal prices would remain between $100 per tonne and $130 per tonne until 2013.
The call for export regulation by Dames followed a similar plea by the strategic market manager in Eskom’s primary energy unit Jeanie Moothoo, who said in November producers were increasingly focused on coal destined for export, because of the higher revenue this generated.
“Domestic pricing principles need to be clarified,’ she said, according to a Reuters report. “There needs to be a clear policy on coal exports versus domestic requirement.’
Similarly, Deputy Mining Minister Godfrey Oliphant said at a conference that government may look at amendments to its mining act to protect local coal supplies from a push for exports.
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India’s state-controlled resources purchasing company, MMTC, is opening an office in Sandton on Monday, precisely with a view to increase coal exports to that country.
“Last year, India imported about 20 million tonnes of heating coal, but we expect this will reach 120m tonnes per year by 2015,’ Indian Consul General in Johannesburg Vikram Doraiswami said.
The country will be taking 10 new coal-fired power stations into commission in the next five years – each of them the size of Eskom’s Medupi project.
Australia and Indonesia, two other large exporters, expect to grow exports by between 4% and 8% per year during this period.
– Sake24
