Eskom waits for clarity on coal classification

By Monde Maoto

National electricity utility Eskom is waiting for clarity on the classification of coal as a strategic source‚ a move that will ensure security of supply for its power stations while balancing the need to grow coal exports‚ CEO Brian Dames said on Tuesday.

Speaking at this year’s Mining Indaba in Cape Town‚ Mr Dames said the state-owned utility was engaging South African coal miners about limiting price increases to 10%.

Coal‚ renewable energy‚ gas and nuclear energy are expected to drive energy expansion projects in emerging markets.

As part of the government’s 20-year Integrated Resources Plan 2010‚ coal is expected to account for more than 45% of the country’s energy mix.

According to Mr Dames‚ the utility’s coal costs have increased 17% a year on average.

"Eskom will not meet South Africa’s electricity needs alone. The private sector also needs to play a role‚" he said.

Eskom has embarked on a R340bn infrastructure expansion programme‚ which entails among others the construction of the Medupi coal-fired power station‚ Africa’s biggest‚ in Limpopo province.

The South African mining industry — coal‚ platinum and gold miners — account for 14% of Eskom’s power sales each year. Large industries‚ excluding municipalities‚ make up 8%-10%.