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Johannesburg - There's not enough coal left in Mpumalanga to provide Eskom's power stations in this province for the rest of their useful lives.
Brian Dames, Eskom head of operations, says South Africa urgently needs a comprehensive coal strategy to find solutions for the coal challenges confronting the country (and Eskom).
"While Eskom's demand for coal has risen 5% a year in recent years, production of coal in South Africa has remained static. That is why it is currently so difficult for Eskom to get cheap coal. Demand exceeds supply. Huge investments in coal mines will be needed over the next 10 years. South Africa requires at least 40 new coal mines."
This size of investment, says Dames, could cost up to R40bn.
He says the logistics of transporting the coal would require further investment.
Large volumes of coal have to be transported by road because there is simply no alternative. If the trucks stop, power will stop - it's as simple as that. Last year when demand for electricity was at its height and Eskom had to transport coal urgently, up to 5 000 loads of coal had to be transported by road every day. There are fewer today, but the number is still significant."
According to Dames, South Africa's coal resources are increasingly distant from coal-fired power stations.
"The future of South Africa's coal supplies lies in the Waterberg (in Limpopo). But there is neither water nor the necessary logistical infrastructure there to convey the coal from the Waterberg two other provinces."
Because of the scarcity of water Eskom cannot erect too many power stations in the area.
Eight of Eskom's 11 largest coal-fired power stations are in Mpumalanga.
Kusile, one of two new ones, is also being developed in the province.
Dames says Eskom is having continuous meetings with government and other important role-players like the coal industry to seek solutions.
He says Eskom is already planning to develop a new rail line in Mpumalanga between Amersfoort and Ermelo so as to supply the Majuba power station with coal.
"A sound business plan has been drawn up. The railway will pay for itself once in operation; it is only the initial capital cost that has to be found."
Dames explains that this 100km rail line will cost about R4bn
For more business news in Afrikaans, go to Sake24.com
- Sake24