'Gupta coal bites Eskom'

With winter fast approaching and electricity demand expected to peak‚ the Gupta coal deals have come back to haunt Eskom once again‚ says energy activist Ted Blom.

Blom warns that Eskom has less than ten days to implement drastic corrective measures or South Africa will face another blackout‚ which SA struggled with in 2008.

Blom‚ a partner at Mining and Energy Advisors‚ said that as the Tegeta mines are now in business rescue‚ "a good couple of billion rands will be required to restart operations".

"Given that the Optimum contract expires at the end of 2018‚ that is hardly likely to happen‚" he said in a statement.

The Gupta-owned Tegeta Exploration and Resources mines supplied three power stations‚ including Hendrina‚ Komati and Majuba.

According to Blom‚ Tegeta provides an estimated nominal nine million tons of coal per year into the Eskom supply chain‚ and with operations now closed‚ Eskom is short more than one million tons per month.

“Eskom management should have seen this train smash coming more than six months ago‚” said Blom.

Proper coal supplier management with accurate dashboards of coal availability per operation‚ would have revealed the Tegeta supply as erratic and on a downward trend. Furthermore‚ routine monthly mine visits by Eskom senior management should have shown the plant was scavenged‚ he asserted. "This situation has been public knowledge for months‚ especially in mining circles."

SA is now running on the expensive open cycle gas turbines which burn more than a billion rand of diesel per month and have been doing so since the beginning of 2018‚ he said.

Whereas Eskom claims to have 30 days coal stockpiled‚ Blom indicates this includes more than 10 million tons at Medupi - which is inaccessible to the Mpumalanga stations where the shortage exists.

Eskom executives told MPs on Wednesday that the total system stockpile for all power stations was now at 34 days. If Medupi and Kusile were included‚ this rose to 67 days. They said they needed urgent authorisation from the Treasury to purchase more coal without having to go to tender‚ as seven power stations have coal stockpiles that are lower than the levels required. Meanwhile‚ coal is being moved from stations that had healthy stockpiles to stations that did not have sufficient stock.

On Monday‚ energy analyst Chris Yelland raised a red flag when he revealed reports about “alarming coal supply problems at numerous Eskom coal-fired power stations in South Africa’s Mpumalanga province.

“Eskom has been relying on emergency‚ diesel-driven‚ open-cycle gas turbines regularly to meet demand this year. The latest coal supply reports suggest that Eskom’s current coal supply problems are as serious‚ if not worse‚ than those that existed in South Africa shortly before the load shedding of 2008‚” he wrote on the website ee publishers.

He said coal stockpiles were low at Arnot‚ Camden‚ Hendrina‚ Komati‚ Kriel‚ Majuba and Tutuka power stations.