More Than Half of South Africa's Coal Plants Low on Stock

(Bloomberg) -- More than half of South Africa’s core coal plants are running low on fuel, with at least four holding less than 10 days of supply, and the country’s power utility plans on trucking and railing emergency stocks as far as 400 kilometers (249 miles).

State-owned Eskom Holdings SOC Ltd. has 15 around-the-clock baseload coal stations throughout the nation, nine of which have less than 20 days of supply, spokesman Khulu Phasiwe said. That includes the 940-megawatt Komati plant that’s only capable of keeping 10 days of stocks, but is also short of its own prescribed minimum.

The constraints at the plants in the eastern, coal-rich province of Mpumalanga are mainly because the company that supplies them is under business rescue, Phasiwe said earlier on Johannesburg-based SAFM radio Monday. Most of the affected plants -- Hendrina, Komati and Majuba -- are supplied by mines owned by Tegeta Exploration and Resources Ltd., a company linked to members of the politically connected Gupta family’s Oakbay Investments Ltd.

South Africans endured rolling blackouts in 2008 and again in 2014 and 2015 due to insufficient coal supply and a lack of investment in new plants. The lack of electricity curbed growth in the continent’s most-industrialized nation, according to economists.

Eskom plans to transport coal from its delayed Medupi power plant in Limpopo province to the facilities in Mpumalanga, and plans to build an alternative, dirt road to move the fuel so as not to compromise existing freeways, Phasiwe said. The utility is also in talks with state rail company Transnet Holdings SOC Ltd. to move the coal by train.

While Eskom has capacity to meet demand, it will use plants that burn costly diesel fuel for generation to get through peak demand times, Phasiwe said.

Oakbay said in August last year that it agreed to sell Tegeta for 2.97 billion rand ($198 million) to Swiss company Charles King SA. The disposal was expected to be concluded in 12 months, Oakbay said at the time. Companies linked to the Guptas including Tegeta Resources, Optimum Coal Mine and Shiva Uranium were placed under administration earlier this year.

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