Unlocking value in discard coal
The current and medium-term shortage in power in South Africa, and its consequences for industry, is one of the major risks that many operations, including Anglo American, face. Utility supplier, Eskom, is ‘managing a tight power system’ and higher costs for power will cut into profits and undermine the viability of some industrial operations.
These projections and risks apply, in particular, to Anglo American’s platinum operations, located in two provinces, North West and Limpopo. The operations, which involve smelters, are energy intensive. Discard coal in the dumps (owned by the company) totals many millions of tonnes.
A study, undertaken to assess the feasibility of unlocking the value in discard coal to reduce the dependency on Eskom, concluded that Anglo American Thermal Coal could create value for the organisation by exploiting discard coal to produce energy. This article outlines the particular challenges encountered.
- The current medium-term shortage of power for South African industry poses a major risk to many operations.
- Electricity prices are likely to rise sharply in the future as the utility attempts to cater for rising maintenance costs and the costs of new plant.
- The role of IPPs is becoming clearer now, and many larger industries are well positioned to enter this aspect of the energy generation landscape in South Africa.
Khanyisa IPP – 450 MWe CFB project: Practical challenges
By I Hall, J Eslait and P den Hoed, Anglo American
Electricity+Control, June 2012 (pgs 26 – 33)