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SA needs 40 new coal mines, Eskom warns

Johannesburg 11 August 2009 Sapa

South Africa needs at least 40 new coal mines to prevent shortages over the long term, Eskom operations head Brian Dames said in an interview published on Tuesday.

"While Eskom`s demand for coal in the past few years has been increasing by five percent per year, coal production in South Africa has remained constant," Dames told Sake24.

"That is why it has become so difficult for Eskom to get coal cheaply. The demand is higher than the supply.

"In the next 10 years, big investments would have to be done in coal mines. South Africa needs at least 40 new coal mines," said Dames.

Such an investment could cost up to R40 billion, he added.

Dames said further investment was required in the logistics behind transporting coal.

"Great volumes of coal have to be transported by road because there is no alternative. If the trucks stop running, there will be no more power. It is as simple as that," he warned.

Coal sources are far from coal power stations, exacerbating the problem.

Dames said the future of South Africa`s coal supply was in the Waterberg in Limpopo, but currently there was not sufficient infrastructure to transport coal from the Waterberg to other provinces.

Also, there was a lack of natural water resources in Limpopo, which would make it difficult for Eskom to build power stations there.

Eight of Eskom`s 11 biggest coal power stations are in Mpumalanga.