JOHANNESBURG (miningweekly.com) – South African power utility...

JOHANNESBURG (miningweekly.com) – South African power utility Eskom has put out a request for proposals for the supply of thermal coal to a number of its power stations.

The State-owned utility, which last week agreed a ten-million-ton-a-year deal with the Firestone/Sekoko joint venture, invited proposals to supply low-calorific-value coal from July 1, in three possible specifications.

In Specification 1, the utility needed 6.1-million tons of coal with a minimum calorific value of 24.1 MJ/kg, while Specification 2 called for 10.1-million tons of coal at a minimum calorific value of 21.7 MJ/kg.

Coal in Specification 2, which is intended for the 3 654 MW Tutuka power station, in Mpumalanga, should also have a minimum sulphur content of 0.7%.

Specification 3 called for 2.8-million tons of coal at a minimum calorific value of 20.6 MJ/kg.

The power supplier said it preferred coal to be supplied by conveyor belt to its power stations, while rail and road transport were less desirable means of delivering the coal. The power utility said it would least desire to be responsible for the collection of coal itself.

The coal supplies would undergo testing at laboratories of Eskom’s designation, to determine the quality and properties inherent in the proposed coal supply as part of the parastatal’s increased vigilance on the quality of continuous supply streams, after below-specification coal was partly to blame for underperforming power stations in the past.

The request for proposals would close on May 4, at 10:00.

Last week, ASX- and JSE-listed Firestone Energy signed a memorandum of understanding with Eskom for a 30-year thermal coal supply agreement.

Continental Coal also recently signed an agreement with the utility to supply some 720 000 t/y of thermal coal, over an initial three-year period starting in March.

Last year, Eskom indicated it had contracted 80% of its cumulative coal supply up to 2020, with 47% of the coal bought on cost-plus contracts, 24% on fixed-price contracts and 29% on short- to medium-term contracts.

Eskom estimates that about 15 new coal mines would have to come on line by 2015 and that R100-billion would have to be invested in the domestic coal mining industry by 2018.