We are not facing a coal cliff: Eskom

Charges that Eskom would be facing “a coal cliff” in the coming years were dismissed by acting chief executive Brian Molefe on Thursday.

At a press briefing ahead of the public enterprises budget vote in the national assembly, Molefe was asked whether Eskom would revise its policy of insisting that black ownership of coal suppliers should be 51% and whether this presented a problem with securing cost-effective coal supplies.

He answered that there was “200 years of coal under the ground” in South Africa and dismissed the idea that the country was facing a coal cliff where it would have short supplies.

Molefe acknowledged that there were a number of coal contracts coming to an end in the next two years, but Eskom was ready to negotiate contracts “that we think are best for Eskom under the circumstances”.

“It is not as if South Africa is running out of coal… there will be a lot of coal (supplies),” said Molefe, who was flanked by Public Enterprises Minister Lynne Brown.

Asked specifically if Eskom would be flexible about the 51% BEE rule, he said: “Black economic empowerment is the policy of the government. We will insist on it.”

He repeated that any contracts for the supply of the coal to the coal-fired power stations – such as Medupi and Kusile – “would be in the best interests of Eskom going forward”.

Brown entered the debate about BEE and its impact on Eskom’s contract costs, saying: “We have to transform the economy if you look at the figures … you will see largely … the economy has not transformed. There are a couple of new BEE people participating… but in essence it remains in the hands of large white conglomerates.”

Brown added: “that has to change. … (government) is going to do it (implement black empowerment) that empowers our people and continues to grow (the) economy.”

Source: News24

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We are not facing a coal cliff: Eskom