Spike in ‘coal mafia’ activity targeting Eskom: report

 ·14 Aug 2022

Syndicates are hijacking vital coal supplies destined for Eskom power stations, the Sunday Times reports. And while this practice has been ongoing for many years, the recent spike in coal export prices has seen this activity soar.

The Sunday paper said that the “coal mafia’’ is exporting the coal at 10 times the price paid by Eskom as Russia’s war in Ukraine has meant even bigger profits for these syndicates.

A former operative in the coal mafia told the Sunday Times how coal loads are swapped in Mpumalanga coalfields for lower-grade coal or discarded coal by-products, which are inefficient and can damage power stations.

He said the scale of the theft is enormous. “One night almost 2,000 tonnes of RB1 (high-grade) coal was dropped off. You can do the sums. To give you an idea, 2,000 tonnes fills 65 trucks.”

Public Enterprises minister Pravin Gordhan said he would tackle the “mafia” groups that have compromised Eskom’s operations and contributed to nationwide blackouts.

“You’ll begin to see more and more visibly push back in this particular regard from the various authorities,” Gordhan said in an interview with Bloomberg recently.

Law-enforcement agencies have identified a “coal mafia” in the north-eastern Mpumalanga province – home to one of the world’s biggest fossil-fuel-burning power plants – that has infiltrated the structures of legitimate companies and set up parallel operations in illegal mining and coal supplies that have thrived, Gordhan said.

That’s resulted in Eskom receiving sub-standard loads of the fuel, including pieces of metal and rubble that damage its plants, he said.

The authorities are also investigating cases in which Eskom is billed for thousands of litres of fuel oil, which is used to run power plants, that aren’t delivered. And probes are underway into instances in which employees are suspected of operating in cahoots with companies to ensure that plant operations are disrupted, to secure a constant flow of work for contractors, he said.

The damage caused by the corrupt practices is among the factors that last month drove Eskom to deepen power cuts to the worst level in almost two years, Gordhan said.

Eskom spokesperson Sikonathi Mantshantsha said that of the “between 100-million and 110-million tonnes of coal bought by Eskom a year, 62% is mined in Mpumalanga.

“The quality of coal can affect a power station in many different ways depending on the nature and extent of the coal quality.” He said that when inferior coal was burnt “the power station will generate fewer megawatts”.

It could also cause severe damage to the mills and other critical components of the power station, he said.

South Africa’s 2019 energy blueprint – which is currently under review – envisions coal accounting for 59% of electricity output by 2030, down from more than 80% currently, reported Bloomberg.

About 18 gigawatts of Eskom’s older coal capacity is scheduled to be shut down by 2035, with Kusile and Medupi the only other remaining plants that use the fuel expected to still be operational by 2050.

The South African National Energy Development Institute, a government research unit, estimates that more than three times the amount of renewable power generating capacity will need to be developed to replace retired coal plants.

Read: SARS warns of new scams targeting South Africans

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