Botswana eyes coal exports to Eskom

KEIKANTSE LESEMELA
Correspondent | Friday June 14, 2013 00:00

At this week's resource sector conference, Shumba Coal managing director Mashale Phumaphi said Eskom was eager to import coal from Botswana. 'Eskom is interested in importing coal from Botswana,' he said. 'They need 60-million tones a year of new coal to come on stream and in the next few years, they will need 120-million tones before 2020'.It is however unclear how the exports to South Africa will be treated as that country designated coal as a strategic resource last year. Eskom has fought to secure quality coal supplies for short, medium and long-term generation, partly because South African producers favour lucrative export markets.

In addition, other coal produced in South Africa is beneficiated on a massive scale to produce oils, meaning the supplies Eskom does receive are usually at rising costs. Over the years, the utility has also found itself competing for supply with Indian buyers who are aggressively in the market for the same low-grade coal that Eskom uses in its power stations.Over 80 percent of Eskom's generation is fuelled by coal. Phumaphi explained that in Botswana alone an additional 600 megawatts is required in the short term, adding that various projects underway were also capable of significant coal exports.

'Current resources holders have plans to produce over 115 million tonnes of coal per annum for export and this number could increase substantially,' he said, adding that Mmamabula and Morupule areas had the potential to establish nine mines each.South Africa's fast economic growth rate in recent years resulted in electricity supply shortfalls and the need for new generation plants. Leading coal industry experts, Wood Mackenzie has said there is a massive potential power deficit that could emerge in South Africa with a potential capacity shortfall of up to 32,000MW by 2030.It is expected that much of this deficit will be filled with fossil fuels, particularly coal, despite the government's drive for renewable energy.