THE ongoing production problems at the coal mines formerly owned by Tegeta Exploration and Resources is creating havoc for Eskom, the South African power utility, which is reported to have fewer than 10 days of coal at four of its power stations.
Bloomberg News quoted Eskom spokesman, Khulu Phasiwe, as saying the constraints were down to the Tegeta mines. One of them, Optimum Coal Mine, is in business rescue. It is unknown how well capitalised the operation is but reports from visitors to the operation say it must have been poorly run whilst under the control of Tegeta.
Eskom plans to transport coal from its delayed Medupi power plant in Limpopo to the facilities in Mpumalanga and plans to build an alternative, dirt road to move the fuel so as not to compromise existing freeways, Bloomberg said citing Phasiwe. Eskom was also in discussions with another state-owned company, Transnet, to move the coal by train.
“Out of our 15 coal-fired power stations, 10 of them have less than 20 days. Clearly this is contrary to what the regulator has prescribed,” Phasiwe told Reuters in a separate report. “If there is no coal it may hamper our ability going forward, but to avoid it being hampered we are diverting coal from other power stations,” Phasiwe said.
“This is a clear indication that bad management decisions at Eskom are at the heart of our high electricity prices. Depleted coal stock piles will result in coal being purchased at premium prices, which will likely result in Eskom requesting another electricity price increase,” said Ronald Chauke, Manager: Energy Portfolio of the Organisation Undoing Tax Abuse (OUTA).
“We are deeply concerned that the low stock pile levels will inflict a severe blow to our already-fragile economy. In addition, we suspect that Eskom will not be able to meet South Africa’s electricity demand and will be forced to begin load shedding,” said Chauke.
