eskom and south africa

Its been an interesting time reading the posts from people knocking the company and from those that support it. The beauty of living in a country as great as this one is we are all free to voice our opinions. I have to say I was disappointed with the placement at 18 cents as Ive always been open about being heavily into CDS and as such am taking a hammering to say the least.
Having said that I am still confident in CDS and the management of making this a very good company and a profitable one to those that have stuck by them through the ups and downs, though at the moment more downs. Its easy to blame the main person, just like its easy to blame a coach of a poorly performing team, but they have been at the helm now just over a Month and so far we may not have seen much happening, but lets give them a bit more time. It all takes time to get the ball moving so lets be a bit more patient.

Did we all think that just because Paul Jury was taking over the SP would shoot through the roof, I think a lot of people did have that impression and as such have been greatly disappointed by it all.
Now the people who have negative thoughts about the company have been told to sell etc well maybe they were some of the ones caught up with the expectations of CDS and poured in money they could ill afford to lose into them and as such cant sell now at a huge financial loss and so hold on in the hope of the SP going higher. I know I have been in that situation before myself and have learnt from the bitter experience.
Lets stay focused on what the company has in the form of resources and the management it has.

From 12 holes drilled they have increased its estimated inferred resource by 78 per cent to 739 million tonnes. Imagine what the next 98 holes are going to produce if they can get a 78% increase from just 12 holes!

The three Comdek properties are on the border with Botswana and are serviced by good quality roads. The Lisbon and Zoetfontein properties are within 30km, and the Koert Louw Zyn Pan property is within 50km of the Grootegeluk opencast
coal mine. Immediately adjacent to that mine is the rail head which leads to the Richards Bay Coal Terminal, the largest South African coal export port. Also adjacent to the mine are the operating Matimba and the under construction Medupi coal fired power stations.

This makes very interesting reading to say the least:

SA coal production not increasing fast enough – Eskom
The current growth rate of South Africa’s coal production lags Eskom’s needs significantly. From 1999 to 2007, the average burn rate grew by 4,5% a year, while the country’s production rate grew by only 1,4% a year, which is the reason why Eskom has a supply problem, says the power utility’s Piet Viljoen.

“The mines did not grow and did not plan to grow,” he says.

In the meantime, the coal price has increased and the differential between the export and local coal prices has been widening dramatically. “At those sorts of prices it is obvious that mining companies exporting coal do not want to supply Eskom,” he says.

“Mining companies are starting to export lesser qualities, which leaves no coal for Eskom. If they are able to sell the same quality of coal on the export market that they can sell to Eskom, then it is obvious that they will choose to export as they will get a higher income. This will have a detrimental impact on Eskom and the country,” he says.

He adds that South Africa needs to increase coal production. “It is getting more difficult for Eskom to find reliable contractors for coal, because the mining companies rather want to place their coal on the export market.

“Eskom has to beg for coal, and now we are trying to turn this around by speaking to the smaller mining companies for coal. We cannot afford to lose one ton of coal.

“Don’t complain about not having electricity if you are not willing to pick up the coal and send it to the power station,” he says.

He adds that Eskom is looking at upgrading roads to make up for its excessive road usage to transport coal, and add a new railway line to service its power stations.

“We have been in talks with Transnet for an integrated logistic network for Eskom. We committed to spending R40-million on a prefeasibility study to build a new railway line to the Waterberg. The railway will supply Majuba and all the other stations to take the trucks off the roads,” he adds.

“Things such as road conditions, mining rights, the export market, and the shortage of skills are working against Eskom, and if they are not going to be resolved, Eskom will never meet its tonnage needs. Any delays will increase short-term contract dependence, which means that, if Eskom pays more for coal, electricity will be more expensive,” he concludes.
Rest of the article can be read here:

http://www.globalcoal.com/news/coalnews.cfm

I for one cannot attend the meeting on September 5th due to business commitments and as such I am hoping that the shareholders of CDS that attend the meeting will post on here what went on at the meeting as much detail as possible. We are all here for one thing to make money, plain and simple otherwise we would have our money in a bank or short term deposit. Lets all work together in obtaining proper information and research as possible in which we can all prosper from.

Some information found while researching:

Eskom: http://www.sagoodnews.co.za/infrastructure/eskom_invests_r85bn_in_cleaner_coal-fired_power_station.html

South Africa: http://www.sagoodnews.co.za/newsletter_archive/we_south_africans_always_overreact.html