South African power utility Eskom said on Wednesday the country would need to invest up to R110-billion in coal mining by 2020 and dig at least 40 new coal mines in that time.
State-owned Eskom said Africa’s biggest economy, which is in the grip of a power shortage, will need to produce 374-million tonnes of coal by 2018 to meet growing demand.
With current projects in place and taking closures of old mines into account, South Africa is expected to produce 385-million tonnes by the same time, creating a safety margin of only three percent, Eskom’s coal specialist Johan Dempers said.
”We will need 40 mines to be opened requiring a large number of mining rights to be awarded in a short period of time…we will need between R90-billion to R110-billion to be invested in coal mines by 2020,” he told a coal, carbon and energy conference in Johannesburg.
Demand would be driven by higher private and commercial consumption, a rise in exports to meet growing demand, both from Europe and Asia, and the need to feed coal into coal-to-liquids (CTL) plants planned by petrochemicals group Sasol.
Dempers said that by 2018 Eskom itself would require 200-million tonnes of the coal to supply all its power stations, including two currently under construction and another two power stations the utility said it would need by then.
The two new plants, Medupi and Kusile, will provide 4 800 MW of electricity each, and are due to come on stream in 2015 and 2016 respectively.
Dempers, Eskom’s Chief Geologist, said the company was studying three potential sites for a third plant, expected to produce about 5 000 MW.
The utility, in cooperation with other government and industry stakeholders, has launched a study to provide an updated assessment of coal reserves in South Africa and the Southern African Development Community (SADC) region.
He said the last study, done in 1987, estimated recoverable reserves in South Africa alone at 55,3-billion tonnes.
”We expect that within 22 months from now we will be able to produce the final report,” he said. — Reuters