NEWS ANALYSIS: Supply issues nudge Eskom closer to coal cliff
The warning had long been sounded that a "coal supply cliff" would hit SA in 2020, when many of the major mines supplying Eskom would run out. Under the leadership of former Eskom boss Brian Molefe and then public enterprises minister Lynne Brown, the power utility said in 2016 that supply was secure and the "cliff" had been consigned to history. However, this week Eskom confirmed it would move 1-million tonnes of coal from its stockpile in Limpopo to its Mpumalanga power stations by road, with plans to soon move much of it by rail. It is a drastic and costly step for a utility in the grip of a financial crisis. It is also a stark indication that the cliff is not history but is in fact fast approaching. The supply crunch results from a deadly cocktail of policy uncertainty in the mining sector mixed with growing negative sentiment towards coal as being dirty, and an added splash of self-sabotage from Eskom.Investment in the sector has declined and existing supply is dwindling. No su...
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