Eskom wants compensation if Glencore can't supply coal | Fin24
 
  • Still falling

    Annual consumer price inflation has dipped to its lowest level in 9 years.

  • Sabotage at Eskom

    President Cyril Ramaphosa says sabotage contributed to power cuts earlier in the week.

  • Digital Banking

    TymeBank says it will be switching gears in a bid to triple its size by the end of 2020.

Loading...

Eskom wants compensation if Glencore can't supply coal

Aug 26 2015 11:24

Glencore Prodeco mining operation in Columbia (Photo: Supplied)

Company Data

GLENCORE PLC [JSE:GLN]

Last traded 42
Change 0
% Change 0
Cumulative volume 1803615
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Eskom’s coal standoff with Glencore unpacked

No 'Plan B' as Eskom coal supply suspended

Glencore coal supply deal with Eskom suspended

Glencore cuts forecasts on weak metals outlook

Glencore CEO: No one can read China right now

Glencore earnings fall, lower capex next year

 

Johannesburg - Eskom said on Wednesday it wants compensation from Glencore's [JSE:GLN] mining subsidiary Optimum if it is unable to supply coal to its Hendrina power plant.

"If they are unable to provide coal to us, they need to compensate us for not meeting their obligations. We have a three-year agreement with them," Eskom spokesperson Khulu Phasiwe told Reuters.

Optimum, which produces 10 million tonnes of coal a year, is under financial strain because it says it was selling coal to Eskom for less than the cost of production.

It has offered to temporarily supply coal to Eskom at the cost of production, higher than what Eskom currently pays, while a new deal is negotiated, the business rescue practitioner said last week.

Eskom said it had a 40 day reserve supply of coal for its 2 000 megawatt Hendrina plant and was looking at other suppliers if Optimum could not resume deliveries within that period.

"We are looking at trucking coal to that power station, that would be our easiest option," Phasiwe said. "Our aim is to get the best price possible because coal prices are so low at the moment."

South Africa's business rescue law allows a financially distressed company to temporarily delay creditors' claims against it or its assets.

Glencore has been desperate to renegotiate the contract it signed in 1993. In terms of the contract, the Optimum mine supplies Hendrina power station with 5.5 tonnes of coal a year.

READ: Eskom’s coal standoff with Glencore unpacked

glencore  |  eskom  |  coal
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
50 comments
Comments have been closed for this article.
 

Company Snapshot

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...