South African Utility Scales Back Coal Demand Forecast

Eskom’s Chief Officer for Generation Business Brian Dames said the utility would need almost a third less coal than originally expected to feed its power stations by 2018. The company would require 141 million metric tons per year (mtpy) of coal by 2018, which was down from a previous estimate of 200 million mtpy. While Eskom had reduced its long-term coal demand by 30%, Dames stated that there was significant anxiety over where that coal would come from. South Africa did not have coal mines with large enough resources to match Eskom’s total current requirements. He said that Eskom believed that there was enough coal in South Africa to meet its demand, but said mining companies had to invest in new projects to exploit these untapped resources. Dames also believed that the South African coal industry was still in a growth phase and had not reached “peak coal.”