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South Africa: Eskom will pay a higher price for future thermal coal supplies


South Africa: Eskom will pay a higher price for future thermal coal supplies

Report summary

Eskom's coal prices have increased five-fold over the past 15 years, due to higher cash costs and more recently new expensive supply contracts.  The coal supply deficit from traditional cost-plus and key fixed-price mines has increased to one third of Eskom's total annual consumption, reaching 39 million tonnes in 2015. This upward trend in coal prices is set to deteriorate for Eskom as some key supply contracts near an end.

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Description

This Coal Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

Participants, suppliers and advisors can use it to look at the trends, risks and issues within the coal industry and gain an alternative point of view when making decisions.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets.

Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future decision making. From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • Introduction
  • Sharp rise in coal costs
  • Future prospects even more bleak…
  • Conclusion

In this report there are 5 tables or charts, including:

  • Executive summary
  • Introduction
  • Sharp rise in coal costs
    • Location map: Eskom's coal-fired power stations and key supplying mines
    • Eskom's cost-plus and key fixed-price mines average total cash cost 2000-2015, R/t
    • Eskom's coal cost, price and total burn
    • Eskom annual cost and price escalators, % change year-on-year in Rand terms
  • Future prospects even more bleak…
    • Eskom incentive price scenarios
  • Conclusion
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