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Your Tax Dollars at Work: A Giant Coal Plant in South Africa

Officials say a new US-backed coal plant outside Johannesburg will be a boon to the community. Locals beg to differ.

| Fri Dec. 9, 2011 7:00 AM EST

Throughout her neighborhood, there are large piles of "bottom of the barrel" coal—the stuff the company couldn't sell—dumped along the road, left for people in the community to use to cook or heat their homes:

In this community, the mining company often dumps piles of "bottom of the barrel" coal--the stuff they can't sell--for residents to use. Many homes use the coal for cooking and heat."They promised jobs. They promised projects," she says. "But now, no jobs, no projects." Maybe six people in the town have been hired to work in the mine, she says. The rest of them just got a giant hole in the ground.

A manager at the mine is kind enough to show us around. They're shipping out 120 tons of coal per month, he says, which is pretty small compared to others in the area. The manager says they're looking to increase their output, to 200 tons. He points out two thick coal seams that ring the gaping open pit mine. He estimates they'll be mining here for another 12 to 15 years, before moving on. As we talk, massive coal trucks rumble by, carting the coal away. Eskom estimates that another 15 mines will need to be dug in the Mpumalanga province by 2015 to feed the numerous power plants. The government estimates that there is a 50-year supply of coal remaining in the country.

This is an open cast mine, with giant carved into the landscape. This mine exports 120 tons of coal per month, according to the manager.This is an open cast mine, with giant roads carved into the landscape. This mine exports 120 tons of coal per month, according to the manager.After visiting the mine, we continue toward Kusile. There's a constant stream of construction vehicles turning off the main road and onto the long dirt road to the plant. We don't make it very far before a guard stops up. We're still probably a half mile from the plant, but he says we can't go any closer. And we can't take any photos. Soon a fleet of managers and security guards descends upon us, insisting that we delete any photos we may have taken of the plant.

One guy in a bright yellow vest that reads "Eskom Project Manager" tries to take my notebook. Rather than any additional confrontation, we leave—and are followed back to the highway by guards. Or "Eskom goons," as Peek puts it.

Groundwork and other groups challenged the construction of Kusile, both over air quality concerns and because they don't believe the plant will help address a lack of energy for many South African citizens. Two and a half million people, a full 17 percent of South Africa's population, don't have access to electricity currently. Energy prices are high for private homes, and many can't afford it. Industrial consumers, however, have reached long-term pricing agreements with the South African government to get power at low prices, as low as 2 cents per kilowatt hour.

Kendal, as seen from a nearby mine. Eskom, which owns the plant, estimates that 15 additional mines will be needed in the region by 2015 to supply coal to the plants.Yet another power plant, as seen from a nearby mine. Eskom, which owns the plant, estimates that 15 additional mines will be needed in the region by 2015 to supply coal to the plants.Peek says the average person probably pays more than seven times the rate industry pays, and the price of electricity has been on the rise.

The ExIm Bank, the US entity that provided the loan to build Kusile, is the official export credit agency of the US government, authorized and funded by Congress. Its mission is to support projects that will create US jobs, through loans to support business ventures that would increase exports of US products. In the case of Kusile, the loan was provided so that Eskom could hire the Kansas-based engineering and construction management company Black & Veatch International. But it's not entirely clear how many jobs that construction of this plant will create in the United States; the ExIm press release claimed "hundreds of highly-skilled American senior engineers and support personnel" would be employed by providing goods or expertise for this project, but no more specific figures have been put forward.

In March, Eskom reported that the company was responsible for 230.3 million metric tons of carbon dioxide emissions in the previous year, accounting for 45 percent of South Africa's total emissions. Environmental groups in both South Africa and the United States, accordingly, have raised questions about whether it is prudent then to support yet another coal plant in the country, already the biggest emitter in Africa by far. Kusile's supporters argue, however, that the plant is more efficient than others and that it will include the first sulfur dioxide scrubbers in the country. Still, the plant is expected to release an additional 36.8 million tons of emissions per year.

US-based environmental groups have been highly critical of the loan, especially as ExIm has a formal carbon policy (put in place after enviro groups sued the bank) that calls for the bank to support more renewable energy projects, disclose the carbon impact of its projects, and to "be a leader on these issues whenever possible."

In 2010, the World Bank also approved a $3.75 billion loan to Eskom loan to build Medupi, another 4,800-kilowatt coal-fired power plant farther north in South Africa. In that instance, though, the United States abstained from voting on the loan, citing concerns that it lacked "a plan to ensure there is no net increase in carbon emissions." But a year later, the government's export credit agency approved a nearly identical project in Kusile. (Neither ExIm nor Eskom had responded to a request for comment at the time this went to press.)

For now, Peek says his group has accepted that both Kusile and the World Bank-backed Medupi plant will be built. "The challenge we have now is to make sure no more are built," he says, and that South Africans can have "equitable and fair access to energy" in the future.

The entire trip, however, made me realize how entrenched coal is in South Africa—perhaps even more than it is in the US. We drove around in a car powered by fuel that was likely made from coal. The country is even using coal fuel to power airplanes in the country. And for the next 50 years at least, it will probably stay that way.

* Sentance has been corrected.

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