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Brown names Eskom's 27 coal suppliers

Mar 08 2015 13:29
Donwald Pressly

Cape Town - The names of the 27 companies providing coal to Eskom’s coal-fired power stations have been provided to Members of Parliament by Public Enterprises Minister Lynne Brown, but she has declined to divulge the prices paid to each of these companies for their supplies.

In a written reply to DA public enterprises spokesperson Natasha Michael, who asked what were the names of each of the companies providing coal to Eskom and what prices were paid to each, the minister said: “This information is commercially sensitive (and) is subject to standard confidentiality clauses in the agreements with suppliers and thus the information cannot be disclosed without risk to Eskom with respect to litigation and leverage to continue negotiating for competitive pricing”.

With Anglo American [JSE:AGL] reporting that it wanted to withdraw its supply of coal to Eskom because of government requirements that blacks must own at least 55% of a supplier, energy analyst Ted Blom - a former senior executive at Eskom - said that he was certain that Eskom’s costs were rocketing as a consequence of having to source from the black controlled companies.

READ: Anglo could pull plug on Eskom coal supply

Noting that long-term contractors which included BHP Billiton [JSE:BIL], Anglo American, Exxaro [JSE:EXX] and Glencore [JSE:GLN] were paying in the region of R170 a tonne, it was industry talk that “the BEE price is R460 a tonne plus the costs of transporting”. He pointed out that many of the BEE mines were not “mouth” suppliers. Many of the long term suppliers had coal mines right next to Eskom's coal-fired plants but other coal supplies had to be trucked in.

The 27 companies named by the minister as suppliers were: Liketh Investments; Umcebo Mining; HCI Khusela Coal; Sudor Coal; Stuart Coal; Exxaro Coal; Keaton Mining; Kuyasa Mining; Shanduka Coal, whose interests held by Deputy President Cyril Ramaphosa are now held in a blind trust; Ntshovelo Mining Resources; Just Coal CC; African Exploration Mining & Finance Corporation, which is a state-owned mining company; Wescoal Mining; Hlagisa Mining; Perisat Investments; Universal Coal Development; Vunene; Optimum Coal Holdings; Iyanga; Lurco Coal; Anglo American Thermal Coal SA (Pty) Ltd; Anglo American Inyosi Coal; Becsa (BHP Billiton Energy Coal South Africa); BHP Billiton; Optimum Coal Holdings; Anglo/Exxaro JV; and Xstrata/African Rainbow Minerals JV, which has an interest by billionaire Patrice Motsepe.

READ: IDC's coal mine, energy plans could lift Eskom

Blom pointed out that Eskom was facing a coal shortfall from this year through to 2018. It requires 20 new collieries to be established, but none had been established despite an announcement by former Eskom chief executive Brian Dames that 40 collieries would be established, he said.

eskom  |  lynne brown  |  energy  |  coal mining
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