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Johannesburg - For now, Eskom’s 2 000 megawatt Hendrina Power Station in Mpumalanga will keep running.
The 60-day interim deal between Eskom and Optimum Coal was supposed to expire on Wednesday, meaning coal supply to Hendrina would cease.
On Thursday, the business rescue practitioners for Optimum informed Eskom that the mine’s majority shareholder, Glencore, had agreed to continue funding the mine’s R3.7 million-a-day loss, at least until the end of November.
City Press understands that tense negotiations over the mine have been ongoing since a temporary deal was struck in September.
At stake is not only the coal supply to Hendrina, but also the jobs of 500 employees and 1 500 contractors at the Mpumalanga coal mine.
The company was placed into business rescue in July after the Eskom board rejected a deal to increase the price Eskom pays for Optimum’s coal.
Optimum has supplied Hendrina with approximately 5.5 million tons of coal a year since 1993 on a fixed price contract – currently about R150 a ton.
The contract is due to expire in 2018, but for more than a decade it has cost Optimum more to mine the coal than it has earned from Eskom, and the business rescue practitioners now say Optimum needs R400 a ton just to break even.
Eskom is stonewalling
Eskom CEO Brian Molefe has publicly said that he wouldn’t be threatened or blackmailed into a deal.
“They thought that by saying they will stop supplying, we will jump up and down, and sign an increase from R150 per ton to R530 per ton … I called them in and I said: ‘Guys, you see your threat didn’t work,’” he told journalists in September.
Eskom has also invoked a R2.2 billion penalty against Optimum for delivering poor-quality coal, and wants to force Optimum to keep delivering coal until 2018 at the current price.
Business rescue practitioner Piers Marsden told City Press this week: “We do not believe that this is a viable option.”
Marsden is refusing to say that the door is still open for a deal with Eskom, merely saying that they “are considering all [options] available” to avoid a liquidation.
“Our first prize would be to come to a mutually beneficial agreement with Eskom so that a win-win prevails for all … In the event that Optimum was to be liquidated, and this would be our last resort after having exhausted all [options], employees would face the prospect of immediate termination of their contracts.
“They would then have a claim against the liquidated company with little realistic prospect of any payment within at least two years,” Marsden said.
