Exxaro defends Eskom
Sipho Nkosi says there is sufficient coal to power South Africa for the next 200 years.
JOHANNESBURG - Exxaro Chief Executive Officer (CEO) Sipho Nkosi on Thursday defended Eskom after it implemented load shedding for the first time in six years.
The power utility announced an emergency this morning and then confirmed that blackouts will start at 9am allegedly due to wet coal supplies after days of heavy rain.
Speaking to The Money Show on Thursday evening, Nkosi said, "We have had this challenge before but the rains we experienced this time around were quite severe."
He says it is impossible to cover the millions of tons of coal Eskom is receiving at the same time.
Nkosi says coal-burning countries experience a lot more rain for much longer periods withstanding such conditions because they are more equipped.
"They are more prepared than us. They have had this experience for many years."
The CEO says there is sufficient coal to power South Africa for the next 200 years and Eskom just needs to be innovative in how it uses the fossil fuel.
"There are massive resources based in the Waterberg. Soutpansberg and the Free State also have resources we can utilise."
Over 90 percent of the coal produced by Exxaro goes to Eskom, which in turn provides 95 percent of the country's electricity.
Nkosi says Eskom wants coal to be declared a strategic resource so that certainty is guaranteed as far as supply is concerned.
"What worries Eskom is they know the current mines are coming to the end of their lives and we need to ensure coal is available so we continue having lights."
He says the demand for coal has largely shifted from Europe to the Far East, from countries like India.
He says Exxaro will continue focusing on the East for exports because that's where big growth is currently taking place.
'ESKOM IN MUCH BETTER SHAPE'
Eskom says despite the fact it has implemented its system of planned power cuts around the country today, it's still in much better shape to deal with the demand on its grid than it was in 2008.
The utility has been battling to get its new Medupi Power Station online and producing enough electricity.
"This time in 2008, our average coal stockpile levels at power stations were under 10 days but today, they are sitting at 45 days."
Energy expert Chris Yelland says the delays at Medupi are responsible for Thursday's load shedding.
"We should have had an extra 3,000 megawatts on the grid right now from Medupi. This is the 3,000 megawatts that Eskom are saying they are load-shedding today. If we had Medupi on time, we wouldn't have had load shedding."
Yelland says Eskom must face up to the idea that the parastatal itself is solely to blame for the country's power woes.
"When the weather is hot, they blame the hot weather. When the weather is cold, they blame the cold weather. When it's raining, they blame the wet weather. The bottom line is they're blaming everybody except themselves."
He says Eskom simply hasn't been upfront with South Africans about the true nature of the situation.
"Eskom have been underplaying the possibility of load-shedding for many months."
Visit Eskom's website for a full load shedding schedule.
Download City Power's load shedding schedule.
The City of Cape Town has also published a load shedding schedule.