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Eskom ensures extended coal supply

Johannesburg, South Africa — ESI-AFRICA.COM — 08 April 2011 – South African national power utility Eskom Holdings has extended its existing contract for the supply of coal from South African coal exploration and development company Keaton Energy Holdings.

In an operational update released here, Keaton said the quality specification had been changed with a concomitant price adjustment, but importantly so had the contract period. In terms of the contract announced in July last year some 16.5Mt were to be supplied over a seven-year period: now about 20.8Mt would be supplied over 10 years.

“Eskom has requested slightly better quality coal which will mean that, while much the same ROM (run of mine) volume will be mined on a monthly basis, it will be washed to a higher specification, with 175,000t of washed coal being delivered to Eskom every month,” the update explained.

Vanggatfontein’s coal washing capability means that coal can be produced according to varying customer requirements.

Production ramp-up will begin at 50,000tpm in May, rising to 175,000tpmfour months later.

The company said that at Vanggatfontein 145,107t of 5-Seam ROM coal had been produced since the mobilisation of the mining contractor in July 2010. The 5-Seam plant had been handed over to the processing contractor at the beginning of December 2010 and sales had started immediately.

“After a slow start in December 2010 some 48 397t of 5-Seam nuts, peas and duff have been sold. The product has performed well in testing, resulting in good customer acceptance,” Keaton said.

The No. 4-Seam coal has been exposed and coaling has begun to support the completion and commissioning of the No. 4& No. 2-Seam plant, on schedule, during April 2011.

First deliveries of coal to Eskom are planned for the second half of May 2011.