Photo by: Duane Daws
The business rescue practitioners at the Optimum coal mine, in Mpumalanga, announced on Friday that coal supply to Eskom’s Hendrina power station had resumed after an agreement was reached with the State-owned utility that negotiations would commence on the coal supply agreement.
Business rescue practitioner Piers Marsden said that, during the negotiations, coal would be supplied at a base price of about R150/t and that financial support had been secured from Glencore, Optimum’s owner, for this purpose.
“The recommencement of supply is intended to allow for meaningful negotiations to find a sustainable solution for all parties,” Marsden said in a statement.
Eskom spokesperson Khulu Phasiwe confirmed the agreement and said that Hendrina began receiving coal from Optimum from 9:00 on the morning of September 4.
He indicated that the interim agreement would endure for 60 days, during which time Eskom hoped that progress would be made on securing a long-term arrangement with the mine.
But speaking in Parliament on Friday CEO Brian Molefe also indicated that the utility would push ahead with its R2-billion penalty claim against the mine, which it claimed had failed, over three years, to provide coal within the agreed quality specification.
Glencore said previously that the penalties would translate to Optimum supplying coal to Eskom for an effective price of R1/t and, on August 20, the business rescue practitioners suspended the “onerous” coal-supply agreement.
Marsden described the contract suspension as a necessary recourse to minimising the immediate cash losses at the mine and to provide scope and time for the development of a business rescue plan.
The mine is contracted to supply Eskom with 5.5-million tons of coal yearly and at the time of the suspension the utility reported that Hendrina had 40 days of coal stockpiles.
Hendrina has a nameplate capacity of 2 000 MW.