• Rich man, poor man

    Culture change from below is the only way to overcome poverty, says Leopold Scholtz.

  • Tech bubble talk

    After the tech euphoria of 2013, the fast-moving sector has hit a speed bump.

  • Money creation made easy

    Changing the money creation system may be simpler than we think, says Edward Ingram.

Data provided by McGregor BFA
All data is delayed
Loading...
See More

Shabangu: SA must rise to coal challenge

Jan 30 2013 16:52 Sapa
Electricity

The emergence of the export market for lower-grade coal has presented the government with a challenge. (Duncan Alfreds, News24)

Related Articles

Govt secures coal for power plants

Flurry of SA coal trades

Coal strike worries Gigaba, Eskom

Growth in coal demand to slow in 2013

Coal set to overtake oil as top fuel

Coal use to surpass oil in 10 years

 

Johannesburg - A rise in the demand for coal, coupled with higher world prices, has changed the buying patterns of the local coal export industry, Mineral Resources Minister Susan Shabangu said on Wednesday.

"The emergence of the export market for lower-grade coal has presented the government with a challenge, in that it has constrained the availability of coal that was historically sold to our utility Eskom," she said in a speech prepared for delivery at the 2013 McCloskey Conference in Cape Town.

Another problem was the pricing model used for coal procured by Eskom, where it had to buy coal using a formula which resulted in higher electricity costs.

This had been a major contributor to higher inflation in past years, and threatened investment in the economy and people's purchasing power, she said.

Additional pressure on the availability of coal was anticipated because of expected demand growth from Eskom, unless new and expansion projects reached full development.

"This is important, given the role that is increasingly being played by the emerging black-owned mining companies. However, these on their own cannot muster the scale demanded by Eskom's expansion plans," she said.

It was also important that emerging black mining companies played a role in Eskom's procurement process.

Shabangu said she would work with Public Enterprises Minister Malusi Gigaba to ensure a significant portion of state procurement expenditure for Eskom went to black-owned companies.

"This is crucial in our quest to loosen the stranglehold that two or three companies have had for so long over this sector. There is, indeed, room for all if we manage our sector's affairs properly and fairly."

She acknowledged complaints about energy costs and the direct bearing it had on national economic growth. It was necessary to balance energy costs with the need to provide affordable electricity and economic growth prospects, she said.

Coal was an important component of South Africa's future energy mix and requirements.

"It is therefore paramount that we work towards a common objective, in which South Africa confronts the challenges facing the coal industry and turns them into net positive opportunities for all."


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

eskom  |  electricity
NEXT ON FIN24X

Rich man, poor man

2014-04-24 07:28

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Cope loses members to ANC

President of the Cope Youth Movement, Abel Rangata, and three other Cope members have resigned from the party to join the ANC.

 
 

Latest elections multimedia

11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...