Long-Term Security--Eskom says 80% of coal contracts secured up to 2020

摘要

African power utility Eskom has contracted 80% of its cumulative coal supply up to 2020, but CEO Brian Dames said last week that rising coal prices and competing export markets were growing concerns. The utility buys 47% of its coal on cost-plus contracts, 24% on fixed-price contracts and 29% on short- to medium-term contracts. Eskom's primary energy costs increased by almost 20% to R35.8-billion in 2011, largely owing to a 12.8% a ton increase in the cost of coal. The company expected coal prices to rise by a further 15% in its next financial year. Dames said that Eskom was transferring some of its short- and medium-term contracts to cost-plus contracts, but that negotiations were challenging, as suppliers were keen to take advantage of the export opportunities, especially as infrastructure plans were coming to fruition.