Coal junior Wescoal’s Khanyisa colliery. One of many juniors struggling to contend with Eskom’s new BEE shareholding requirements

We need a new black-owned coal major, says The MSA

The 2018 coal cliff is looming and the reality is undeniable – Eskom has not secured sufficient coal supply to feed its existing power stations in less than three years’ time. A lack of new project development (and supply), resulting from weak coal prices, is not the only contributing factor to this crisis in South Africa says Philip Mostert, former Eskom employee and current principal coal consultant for The MSA Group. Laura Cornish writes

The Witbank and Highveld coalfields are entering their twilight years, or are they? According to Mostert, Eskom has completed studies verifying that there are sufficient coal reserves in these regions to meet its energy needs for the next 40 years (taking into account a growing electricity demand).

“Eskom knows what coal reserves have yet to be mined and is confident there are sufficient volumes to meet the needs it has outlined in its 40 year plan.” However, it has yet to sign contracts to secure this coal as new legislative requirements are turning the coal majors away and making it difficult for juniors to develop and mine smaller deposits. It has been well publicised that Eskom has a preference for all new coal supply contracts to be secured from companies which are at least 50% plus one share black-owned.

This has resulted in a slowdown in new coal mining developments coming online as existing and potential suppliers re-evaluate their ownership options…

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