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Row between Eskom and miners brews

World Coal,

A row is brewing in South Africa between the mining companies and Eskom, South Africa’s state utility, which has accused miners of focusing on exports and the higher profits they generate, leaving the utility struggling to secure the coal it needs. The utility has been lobbying the Government to implement export quotas and guarantee sufficient supply.

The Chamber of Mines, which represents the county’s mining industry, has since hit back, rejecting Eskom’s criticism on the grounds export coal is of a completely difference quality than that which Eskom uses. In a statement quoted by Reuters, the chamber said: "Heavy handed mechanisms to try and regulate the domestic coal mining industry and interference in a voluntary market based system may well lead to significant distortions and unintended consequences for the country and may well prejudice security of primary energy supply."

"The better coals are exported generating much needed foreign currency and the lower quality high-ash coals are used locally for electricity generation and liquid fuel production," it said, adding that Eskom was getting coal on a "competitive basis".

Eskom had wants to renegotiate its deals with coal suppliers hoping for pricing based on "efficient cost and fair returns", to limit the utility's exposure to international price.

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