Early in 2015, an Eskom manager walked into a boardroom full of senior officials with a two-page presentation, headed “A failure to adequately spend on capex now will result in an operational calamity”. The first page contained a graph that projected Eskom’s coal costs over the next eight years. One of the two lines showed what the utility would spend on coal if it allocated the full amount of R27bn needed to recapitalise its tied mines — those situated close to power stations that are dedicated to supplying Eskom with cheap coal through “cost-plus” or long-term supply agreements. The recapitalisation would involve anything from sinking new shafts to reach higher-grade coal deposits, to refurbishing draglines, the gigantic machines that scoop up earth at open-cast mines. The second line represented coal spend, with no capital allocated to Eskom’s tied mines. From 2016, the lines begin to diverge dramatically as production plummeted at the run-down tied mines near Eskom’s power plant...

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