Concern over accuracy of SA coal reserves

Johannesburg, South Africa — ESI-AFRICA.COM — 10 November 2010 – South African power utility Eskom has acknowledged that it is concerned about the accuracy of South Africa’s coal reserves, but nevertheless maintains that it has a sufficient supply of coal for the next 50 years.

Eskom’s expected increased demand for coal comes as the accuracy of Southern Africa’s coal reserves moved under the spotlight after Umvoto Africa technical director Chris Hartnady reported last week that the remaining coal reserves in the subcontinent were only about 15 billion tonnes, rather than the 50 billion tonnes previously estimated by government studies.

Eskom said Hartnady’s concerns were legitimate, and noted that it shared these concerns. Eskom spokesperson Hillary Joffe said the immediate issue for the group was that local coal companies sought to export to India low-grade coal traditionally offered to Eskom.

It is unclear as yet what the fears of dwindling coal reserves, anticipated high costs of extracting coal, and competition for low-grade coal will mean for future electricity prices.