No Coal on Carte Blanche - Is that the reason ?

[rohor]

Carte Blanche brought a new angle on the load shedding.

The angle was that it was a coal supply problem, and that power stations do not have sufficient coal stock-plies to meet demand.

The helicopter footage proved that this is a real possibility.

Question is where is the coal.

If it is not at the power stations, because of BEE transport problems, then in theory it must be still at the mines. Or is it ?

If the coal mines are not getting rid of the coal production quick enough, then I think we would have heard of that by now.

Perhaps the coal has been "diverted" to the Richards Bay Coal Terminal, and is already in export for much more profit than supplying to Eskom.

[Dave A]

Perhaps the coal has been "diverted" to the Richards Bay Coal Terminal, and is already in export for much more profit than supplying to Eskom.

You raise an interesting motive behind the rather obvious problem.

The Carte Blanche angle seemed to be transportation problems leading to the loss of the stock pile. But I tend to agree we're going to find a "greed before interests of the country" motive in this somewhere - although I was looking at a slightly different angle.

The footage apparently showed trucks loading the coal straight onto the conveyor feeding the hoppers. From memory (again - a long time ago), those hoppers hold about 24 hours worth when full. Talk about Just-In-Time stock management.

And it was JIT management theory that had me thinking - the benefit of JIT is improved cashflow - but it also could affect the bottom line depending on when you expensed the coal in your book-keeping.

Now the Directors have been getting stunning bonuses in the multitude of millions based on the fantastic profits of the Eskom operation - due, I'm sure they'll say, to improved efficiencies.

But how much is due to (effectively) selling the stock-pile?

[seymour7]

Here's the whole episode transcript: http://www.mnet.co.za/Mnet/Shows/car...ry.asp?Id=3444

[Dave A]

It seems that coal supply is now confirmed as an issue by Eskom too.

The disintegration of Eskom's power generation capacity since early January has been largely due to unexpected failures as well as shortages of coal over a three-week period. It emerged this week that none of its coal-fired power stations was operating at full capacity.

Local collieries have rallied to meet Eskom's urgent call for delivery of about 5 million tons of coal within four months to restore depleted power station stockpiles to 20 days of supply.

Maroga said this week that there were "insufficient coal stocks" to protect against "major coal supply interruptions" at five of Eskom's stations.
extract from Business Report here

Well done Carte Blanche. I think the coal supply issue would have remained hidden otherwise.

[duncan drennan]

There is a pretty interesting article going through the reasons the coal supply has become erratic, as well as talking about how some large companies are getting electricity for aluminium smelters for nearly cost price.

It makes for an interesting read.

It really all comes down to Eskom trying to cut costs on their coal supplies (and people being paid large bonuses for this).

[Dave A]

It really all comes down to Eskom trying to cut costs on their coal supplies (and people being paid large bonuses for this).

Scratch a bit deeper and I think there is more. Two thoughts come to mind:

Ideology needs to take a serious reality check before it is implemented.

Experience is far more important than it is currently being given credit for.