Eskom pays for delays

EXXARO Resources received R 601 million from Eskom in the six months leading up to the end of June for coal the parastatal  had contracted to buy for its new Medupi power station, but could not receive due to delays in the building of Medupi,  BDLive reported on Thursday.

According to the report Exxaro CFO, Wim de Klerk , expects the amount to rise to R1,3 billion come December. The latest supply agreement is that Eskom will start to take caol from November this year.

The payments being made by Eskom can be viewed as penalties in terms of take or pay agreements. These agreements were previously negotiated between Transnet and the coal exporters. “In setting its tariffs, Transnet insists the coal exporters guarantee volumes of coal to be railed. If that coal is not provided on schedule, the exporters still have to pay the railage charges,” de Klerk explained.

According to the report Exxaro has invested R 10.2 billion to expand its Grootegeluk colliery to supply coal to Eskom. The construction delays at the power station has meant that Exxaro is not currently benefitting from coal sales as originally planned which put the group under severe financial pressure.

Meanwhile planned platinum mines in the Mokopane area are also waiting for some clear indication on a delivery date for electricity from Medupi power station. “We cannot mine without electricity and every time Medupi gets delayed, it pushes our plans back,” Gerick Mouton, project director for Platreef Resources’ planned mine in Mokopane said last week. – LiN News/Northern News

“Third power station irresponsible” – Greenpeace

The announcement last Thursday that a third coal-fired power station has been approved by cabinet has been met with strong resistance from environmental activists.

The department of energy defended the decision this week by saying that South Africa is currently turning away investors because it does not have enough capacity in terms of electricity supply and that a third coal fired power station is the only way forward.

Although government is not saying where the power station will be built, Melita Steele, climate and energy campaigner for Greenpeace Africa believes that it will probably be in the Waterberg region which holds more than 40% of South Africa’s coal reserves.

Greenpeace Africa strongly condemned the decision as irresponsible. “Medupi and Kusile have failed to deliver electricity on time or within budget, at a huge cost to South Africans. A third mega coal-fired power station in one of the most water-scarce areas of South Africa will push up the price of electricity, lock the country into a coal addiction and push the country closer to a water and climate crisis,” Steele added.

Greenpeace once again urged government this week to invest in renewable energy saying that it offers huge opportunities for economic growth and job creation. – LiN News/Northern News