Cyril Ramaphosa china africa

President Cyril Ramaphosa addresses the Science, Technology and Innovation Dialogue during the China State Visit, at CSIR International Convention Centre in Pretoria. (Photo: GCIS)

South Africa’s crazy power plan: Ramaphosa, China and Limpopo coal

Why has President Ramaphosa just signed a deal with China for the construction of a 4 600 megawatt coal power station in Limpopo, in direct contravention of Energy Minister Jeff Radebe’s Integrated Resource Plan (IRP)?

Cyril Ramaphosa china africa

President Cyril Ramaphosa addresses the Science, Technology and Innovation Dialogue during the China State Visit, at CSIR International Convention Centre in Pretoria. (Photo: GCIS)

South Africa’s national power grid has arrived at a crossroads of sustainable production and ethical commitments.

The country’s power situation is uneasy for a number of reasons; all of which point, in some way, to the incompetence of Eskom. The national power supplier’s failures are well documented; gross financial irregularities and dubious tender deals which have left power stations short on coal.

It’s the bitter national quagmire created and exemplified by Brian Molefe, the infamous Gupta family and a host of other unsavoury characters driven by greed and sustained by political power under the unscrupulous eye of former president Jacob Zuma.

We can bemoan the current dilemma facing nearly all state-owned enterprises – most South Africans are well aware that these failures are a result of corruption, mismanagement and nepotistic tendencies – but, looking to the future, it’s more productive to ask where the country is heading, as opposed to where it’s been.

Let’s take a look at President Cyril Ramaphosa’s rather dubious power plan, which involves more coal and hands-on Chinese production.

South Africa’s coal conundrum

South Africa’s coal reserves keep the nation’s lights on. Coal-fired power stations account for 77% of the country’s electrical output.

Holding rich coal deposits has been both a blessing and a curse to South Africa. Historically, it’s provided the country with cheap electricity and massive gains made from exports. In fact, 92% of coal consumed on the African continent is produced in South Africa.

But, the nation’s reliance on coal has come at a hefty price; South Africa suffocates under the smog of coal-fire’s by-product, ranking in the top 20 list of carbon dioxide emitting countries, and accounting for 40% of Africa’s total coal-derived CO2 emissions.

With the global move towards cleaner sources of renewable energy aimed at halting greenhouse gas emissions, the Paris Agreement on Climate Change and regulations set by the Group of 20 (G20) summits, have been undersigned by South Africa.

Interestingly, South Africa’s coal use is the highest out of the 20 countries in the G20 organisation. This is a worrying fact, with many environmental groups and sustainable energy organisations bemoaning South Africa’s heavy reliance on coal.

The country has made slow progress in adopting large-scale renewable energy projects that, in time, should be tasked with surpassing the coal, and even nuclear, powered stations.

Eskom running out of coal

The national power utility is in danger of running out of coal, which would effectively turn the country’s lights out. Eskom chairperson, Jabu Mabuza, confirmed that coal stockpiles at nine of its 15 stations are now below the required levels and are standing at less than a month’s supply.

Unfortunately for Eskom, its wounds are wholly self-inflicted. The drastic coal shortage, a result of the company’s dubious dealings with the Gupta family. Eskom will rue the day it inked a coal supply deal with Gupta-owned Tegeta and Optimum coal mine in 2015.

After the infamous state-capture fallout and allegations of gross mismanagement, Tegeta was placed under business rescue administration. Tegeta still is, supposed to be, Eskom’s main coal supplier.

Worse still is that Eskom is now being forced to purchase coal from suppliers it previously burnt bridges with. According to a report by Daily Maverick, Eskom’s cost of coal increased from R42.79 a ton in 1999 to R393 in 2017 – an increase of around 300%.

How much coal does South Africa have left?

Despite Eskom’s incompetence and South Africa’s carbon dioxide problem, the biggest question mark hanging over the head of South Africa’s power grid is the issue of fossil fuel sustainability.

The world has realised that fossil fuels won’t last forever, hence the move towards renewable energy; mainly solar, hydro and wind. Yet, South Africa has been slow on the uptake.

According to Eskom, the country has 200 years’ worth of coal left or 55 billion tons.

As reported by The Citizen, the department of mineral resources says South Africa has coal reserves of 66.7 billion tons. While this may sound like more than enough, geologist Chris Hartnady, who published a report on South Africa’s diminishing coal reserves, has warned of imminent problems, saying:

“The Waterberg Coalfield (Ellisras Basin) in South Africa may be a remaining large resource, but structural complexity, finely interbedded coal-shale strata at large depths, low grades, high ash content and water scarcity are likely to inhibit its major development.

Given SA’s heavy dependence on coal for power generation and electricity supply, an anticipated peak production in 2020 will cause problems for future economic growth.”

Simply put, South Africa is running out of easy-to-reach coal and will need to invest huge sums of money into complex extracting ventures. The question surely is; why keep pouring money into an antiquated pit of dirty energy?

Ramaphosa inks coal deal with China

This is where things get truly bizarre. During his state visit to China last week, President Ramaphosa inked a deal for another new 4 600 megawatt coal power station in Limpopo.

This comes at a time when Energy Minister Jeff Radebe’s much anticipated Integrated Resource Plan (IRP), aimed at charting the country’s future power plan, fails to mention the construction of any major coal plants.

As reported by Fin24, It is legally impossible to build power stations in South Africa unless they correspond to the IRP’s forecasts of power needs, costs and emissions.

Yet, the Department of Trade and Industry (DTI) confirmed the president’s deal with China, saying:

“The Power China International Energy Project in Musina-Makhado SEZ. The aim is to invest in the construction and operation of a 4 600MW coal-fired plant. This is a six-year project construction period.”

China in Limpopo

The South African Energy and Metallurgical Special Economic Zone (EMSEZ) is a state-level energy and metallurgical special economic zone. It is a partnership programme between South Africa and China, prepared for mining and energy production.

According to the official website, the EMSEZ is located in Limpopo and encompasses areas surrounding Musina:

“The EMSEZ is located in the Musina-Makhado Limpopo River Bank area of Limpopo Province, South Africa. Facing with Zimbabwe and Mozambique across a river and connected with those two countries through bridge.

The reserve of surrounding large open-cast coking coal mines is over 10 billion tons, and the chromium resources in South Africa account for over 83% of total global chromium resources, while Manganese resources account for more than 81%. The region is abundant with raw material mine resources necessary for stainless steel production, including iron ore, silicon ore, nickel ore, limestone, etc.”

Speaking to Fin24, Robyn Hugo, an attorney at the Centre for Environmental Rights confirms that the practical implantation if such a plan is shrouded in mystery, saying:

“No one seems to know what this is about.”

Read: AfriForum on land expropriation – China gets the mineral resources, we have proof