Every Friday morning, SAfm’s AMLive’s radio anchor Dhashen Moodley speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Moodley: It is all about coal, everyone wants to know how does coal work, does it need to be wet, does it not need to be wet. What is your take on what’s been happening so far?
Creamer: The story coming out of the Southern African symposium held by the Mining and Metallurgy Institute this week coming through from a very knowledgeable person on coal, who has been studying it for the last 35 years: Prof Rosemary Falcon says that at the moment Eskom is battling because it is being fed with coal dregs.
We used to have a situation where the lower-grade coal went to Eskom and that had the business plan of the higher-grade being exported. What is happening now is that other countries didn't want it in the past, but India now also wants this low-grade coal. So, South Africa is now getting the coal dregs after people are washing the coal for India, because the specifications are a bit wide.
I understand that there may be some arbitration soon and there may be court cases because of the wideness of these specifications. In the meantime, Eskom is fighting one hell of a battle. It is probably dealing with one of the worst grades of coal anywhere in the world, anybody has ever seen.
Of course, that adds to the problem when the weather is bad like this, because you get all the slush falling to the bottom and it is also adding to these emergencies. We have had the fourth power emergency now during this summer maintenance period, because it is becoming maintenance intensive because the grades of coal are so low and it is also becoming an efficiency problem.
We know we are trying to fight CO2 going into the atmosphere, but by doing this we are putting more CO2 into the atmosphere. So all the efforts to have the wind-farms and sun energy are just being offset by what Eskom is having to face. The rekindled argument is that coal must be declared strategic, and this frightens the hell out of the market.
The head of the black-controlled Exxaro Resources Sipho Nkosi said, ahead of the election, they have been having tight talks with the government saying to them don’t rattle the market by uttering the words ‘strategic coal’. Let’s talk, because we can have a win-win situation here. So, behind the scenes they are trying to balance it out, because we also have to export.
We know that the foreign exchange it comes from just the iron-ore exports and the coal exports are 40% of our total exports. We desperately need that, otherwise the rand will weaken and there will be a lot of problems. It can be a win-win situation so behind the scenes they are talking intensely now to make sure that they get greater efficiency out of Eskom, and Eskom does not have these maintenance problems ongoing.
The fourth one in the summer period, how many more? The specifications are met for what Eskom is used to. We also have the situation of a multiplicity of sources coming in with black-economic empowerment now, instead of having one big coal mine feeding a power station from a conveyor belt with consistent coal.
Therefore, your equipment is set-up to deal with that consistent coal, you now have a multiplicity of sources and trucks ruining the roads etc. If you do that, you must change your equipment.
As Rosemary Falcon of Wits University pointed out, you must then have circulation fluidised bed equipment, then it can take all the coal. She is saying that you can do it, but you have just got to know your coal and then you must work the equipment for it.
Moodley: These conveyor belts, Andrew Etizinger told us yesterday, are getting jammed up by the dust that is being produced by this coal. The intensive energy user groups, the ones who have to cut their energy by 10%, are saying that there is something in here, because it is not just about the coal, it is also when the coal stocks drop very low, the very bottom of that coal is a dusty, sludgy, gungy coal, which is getting clogged up in the system.
If we maintained higher stockpiles we will definitely be averting this problem. Andrew Etzinger is on Morning Live right now and I heard that he has just said that there won’t be load shedding today. We were quite concerned about it as the time was indefinite. So good news for many in the mining industry.
Creamer: Very good news even for me yesterday sitting in the dark and our generator, which we’ve set up in our office, didn’t click in. So can you believe that, then you are in trouble.
Moodley: Transnet is doubling the export potential of the locked-in Waterberg coalfields in Limpopo.
Creamer: The JSE-listed company Exxaro Resources praised Transnet yesterday. They are landlocked, so they in a situation where they can not export coal very easily, because they are not in the Central Basin of Mpumalanga; they are in Limpopo, so they are being constrained when it comes to exporting coal. We know how important these coal exports are.
They were saying that they were in a better space at the moment because instead of two trains arriving a week now, four trains are arriving a week. They think that this will be sustainable going forward and that the export level for them is going to double.
Because, this is also a Presidential project to unlock the Waterberg coal to export and to feed into power station with Medupi, this is going to be good for South Africa. We see one parastatal coming in for a lot of criticism, Eskom at the moment, but the other parastatal, Transnet, coming in for quite a lot of praise. At the centre of all of it is coal.
Moodley: Their employees are very happy because Eskom and Transnet have some of the happiest employees in the country. So they are doing something right within the company.
Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.