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South African export coal 77 million tonne in Asia

Coal News - Published on Thu, 13 Dec 2018

Image Source: BusinessLIVE
The South African reported that South Africa is exporting 77 million tonnes of coal to countries in Asia, despite the nation’s power utility, Eskom, complaining of dire shortages. This issue has recently blazed through social media like an anthracite powered inferno. Satellite images showing mountains of coal waiting to be loaded onto ships docked at the Richards Bay Harbour have caused outrage among frustrated citizens. It’s true that Eskom has failed to meet the nation’s power demands – this has resulted in rotational load shedding which has disrupted the lives of citizens and the local economy alike. While Eskom has blamed recent rolling blackouts on a flawed maintenance programme, the utility’s dwindling coal reserves have also caused panic. The company’s spokesperson, Khulu Phasiwe, has, at various points in the year, detailed the dire coal shortage which threatens to pull the plug on South Africa. Currently, 66% of all coal-fired power stations in South Africa have less than ten day’s coal supply.

The National Energy Regulator of South Africa (NERSA) has labelled Eskom’s coal crisis a “grave concern”.

Eskom has admitted that its grim coal predicament emanates from a dodgy tender deal inked with Tegeta Exploration and Resources in 2015. Tegeta was owned by the infamous Gupta family through Oakbay Investments. Oakbay, described as the Gupta’s skeleton key to the state’s coffers, was also a major business interest of Duduzane Zuma – the son of South Africa’s former president. Tegeta managed to secure a lucrative coal supply contract with Eskom after it acquired Optimum mine and the Koornfontein operation. Unfortunately for Eskom, and South African citizens, this deal quickly turned sour, with Tegeta failing to uphold its part of the supply chain management. Tegeta is currently under business rescue administration. Eskom has been forced to return, cap in hand, to previous suppliers it had already burnt bridges with. This has proven to be a costly and uncomfortable exercise.

Yes, South Africa is, and has been, exporting coal to China. South Africa is also exporting millions of tons of coal to Japan and India. This was confirmed by Peter Major, a mining analyst employed by Cadiz Business Solutions. Speaking to 702 Talk Radio, Major revealed that while Eskom may be short of coal – this ineptitude relates to mismanagement, not to the country’s export practices. Major explained “The question asked is very valid; are we going to continue to allow coal exports when we’ve got such a shortage in South Africa? It doesn’t make sense we have a shortage. For years we were the seventh largest coal reserves country in the world – so this is not a coal problem but a management problem.”

Major also explained that coal exports form an integral part of South Africa’s international trade programme, and as such, were lucrative to the developing economy. The mining expert also explained that South Africa’s export market was geared towards a higher quality of coal, saying: “Our export market was developed for our highest-grade coal and it brought the best price. Eskom was built around low-grade coal. Most of this export coal is not fit for Eskom. Eskom’s boilers, Eskom’s power plants; they were designed for the majority of coal that is right next to those power stations, [coal] that we couldn’t sell or export at an economic price. It is a bit of a red herring to say that our exports are starving Eskom or we are freezing in the dark because we are exporting coal to China. That is a fallacy.”

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Posted By : Rabi Wangkhem on Thu, 13 Dec 2018
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