Eskom shops for more coal export prices soar fin24. Stateowned diamond miner alexkor will invest in a coalwashing plant in the witbankmiddelburg area and use its relationship with eskom to get a coalsupply agreement, acting ceo vimal bansi said. Pdf coal contracts and longterm supplies researchgate. An updated coal supply strategy was tabled at the board and when pwc came, they were provided with the coal supply strategy which talked to the transformational approach of eskom to coal. Eskom still negotiating for reasonable prices from coal suppliers. Mr booi noted that pwc had complained regularly about undated documents. Up to seriti to resolve coal supply contract with eskom. The sale is subject to regulatory approval and consent from eskom for the transfer of the coal supply agreement, with anglo saying that it expects the deal to close by yearend.
The key role played by our coal reserves in the economy is illustrated by the fact. The first is a fca which involves transporters that are directly contracted to eskom. Coal supply agreement between eskom holdings soc ltd and the supplier executed at megawatt park, sunninghill. The owner of the new largo licence, blackowned seriti resources which purchased the asset from anglo american last year has yet to sign a coal supply contract with eskom. Inside the coal supply emergency at eskom mybroadband.
Eskoms coal requirements coal brokerage global coal updated its standard coal trading agreement scota in march 2012 to a new trading contract for richards bay 5,500 kcalkg nar. Eskom currently moves about 40 million tonnes of coal using two road transportation channels. The coalfired congella power station in durban and salt river power station in cape town were the first power stations built by eskom, both complete in mid1928. Agreement including the coal quality management procedure as meeting the quality specifications, or otherwise as accepted by eskom. Coal procurement process electricity generation air quality air quality offsets programme minimum emission standards applications new build transmission development plan guide to ipp. The export market has evolved to the extent that the standard coal trading agreement scota specification parameters are used for. Eskoms approval relates to the change of control of saec and the lossmaking duvha coal supply agreement between the stateowned power utility and saec. Immediately afterwards a bargain priced bid emerged to buy. The coal supply agreement with eskom, one of the top 20 utilities in the world by power generation capacity and who generate approx 95% of the electricity used in south africa and approx 45% of. Eskom faces a coal supply shortfall, however has a plan to remedy the problem on long term basis causes of coal supply shortages long term coal strategy pillars unsuccessful negotiations to extend. Arm coal experienced a challenging year, with the weak. Eskom s briefing focussed on the security of coal supply in the future, and concerns over the quality of coal that eskom had been receiving.
Coal supply agreement between eskom holdings soc ltd and the supplier executed at megawatt park. The supply of an estimated 100 hundred million tons of coal to matla power station for a period of 15 fifteen yearsname of institution. At the moment, mbuyelo is elated to document that it has signed off a coal supply agreement csa with south africas public electricity utility, eskom. National treasury gave eskom the green light to sign new contracts with suppliers, however, this process is taking time. An updated coal supply strategy was tabled at the board and when pwc came, they were provided with the coal supply strategy which talked to the transformational approach of eskom to coal suppliers.
The seeds to this story started back when eskom pulled a supply deal at the last minute with glencoreowned optimum coal at the time. South africa needs reliable and affordable electricity. Export volumes were lower during f2009 due to a delay in the commissioning. There is no evidence that the eskom executives who concluded the coal supply agreement between eskom and tegeta obtained approval to procure beyond the lifespan of the mediumterm mandate. Call 08600 37566 should you wish to enquire about progress in regard to your quote or, if you have received a quote, need clarity about information in the quote give. The utility says it has put a number of measures in place to deal with coal shortages at seven of its power stations. This report looks at these trends, and provides the reader to an introduction to fuel supply contracts.
Vlakvarkfontein has been supplying eskom and plans to continue to do so as it renews its coal supply agreement csa with south africas power utility. Forensic investigation into various allegations at. The agreement is for the supply of 720,000 tpa of thermal coal of quality. Valid mining rightpermit and offtake agreements where applicable. Coal procurement process electricity generation air quality air quality offsets programme minimum emission standards applications new build transmission development plan guide to ipp programmes ancilliary services gcca report grid access unit independent power producers supply status adequacy reports. Eskoms drive to procure more coal has given the prospects of glencore, anglo american and south32 some of the largest diversified mining firms listed on the jse a welcome boost. This excludes the coal allocation of two contracts currently out on tender, one of which. Insert name of the mine mining right, for the duration. In 2007, eskom awarded the contracts for boiler works at the. Sources and contracts 35mt of short term coal supplies primarily. Annexure u annexe c the supplier development and localisation commitments.
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. Utilisation of eskom and suppliers spend to foster. Eskom gets guptaowned coal supply, cancels exxaro contract. The first option was to continue to supply eskoms arnot power station with coal on the basis of an extended contract where exxaro would exploit the remaining underground reserves as well as the. The coal supply arrangements with tied collieries require that eskom bear all capital expenditure capex costs for the establishment, development and expansion of a tied coal mine. Pdf coal contracts are lengthening in some regions and becoming more short term in.
In return, eskom gives xstrata notice when excess capacity is needed, enabling it to reschedule production accordingly. Fossil fuel foundation junior coal mining venturesvii. This coal supply agreement, by and between wabash river energy, ltd. The committee was assured that eskom had developed a longterm strategy for response to south african energy needs which would ensure a consistent power supply for the future. Since it started electrifying homes in 1991, more than.
There is no evidence that the eskom executives who concluded the coal supply agreement between eskom and tegeta obtained approval to procure beyond the lifespan of the mediumterm mandate from the board. Fuel sourcing is the department within the primary energy division responsible for the. Ensure that your quote includes copies of annexures a and b the terms and conditions in these annexures form an integral part of your electricity supply agreement with eskom. Inside the coal supply emergency at eskom moneyweb. Coal reserves are dedicated to eskom ensures security of supply fixed price contracts with escalation 24% coal is sold to eskom at a predetermined price the price is escalated annually by applying an. Annexure u standard terms and conditions of coal supply the coal book. Eskom and coal suppliers on coal supply security and. There exists slight modifications between the original and. In 2015, eskom had taken the decision not to renew exxaros costplus contract to supply arnot as the price eskom paid for the coal had become unsustainably high, sometimes exceeding.
Roadmap for eskom in a reformed electricity supply industry 4 executive summary in february 2019, i said that we will make big decisions and take bold steps to embark on a process to fundamentally restructure eskom and the electricity supply industry. The remainder of south africas coal production feeds the various local industries, with 53% used for electricity generation. According to nteta, eskom is facing an estimated coal supply shortfall of some 750 million tonnes from now to 2040. Eskoms briefing focussed on the security of coal supply in the future, and concerns over the quality of coal that eskom had been receiving. Eskom will favour coal juniors with wheels for new supply. Eskom still negotiating for reasonable prices from coal. In terms of the coal supply agreement with eskom, optimum coal mine is obliged to supply 400,000 tons of coal to eskoms hendrina power station each month at the price of r201,46 per tonne. Eskom holdings soc ltd place where goods, works or services are required. Mining right but has an off take agreement for the supply of coal. Roadmap for eskom in a reformed electricity supply industry 4 executive summary in february 2019, i said that we will make big decisions and take bold steps to embark on a process to fundamentally. Eskom has been implementing the department of energys integrated national electrification programme in its licensed areas of supply since april 2001. Eskom to issue new coal contracts soon to avert power crisis. A longterm coal supply agreement with a oneyear rampup and a sixyear supply was concluded with eskom.
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