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Eskom at loggerheads with coal mine companies

Jan 24 2017 20:25
Lameez Omarjee

Johannesburg – Eskom is entitled to be consulted over decisions taken regarding its assets at coal mines owned by Exxaro and Anglo American, said interim chief executive Matshela Koko.

Koko was speaking at a briefing on the state of the system, at Megawatt Park in Sunninghill, Johannesburg on Tuesday.

He was responding to a question on Exxaro’s recent decision to reduce its black ownership from 50% to 30%. Koko said this decision was a “slap in the face” after what Eskom had done to “support them”.

READ: Exxaro shows Eskom finger with new BEE plan – Koko

He explained that part of the reason the Medupi power station was built near Exxaro was because the power utility wanted to support a black mining company.

“We wanted a black mining company that is in competition with South32 and Anglo American,” he said.

“We built Medupi there and gave them 40-year contracts with their eyes wide open.

“We own part of the assets, they belong to us and we’ve paid for them. If anyone decides to give R1.8bn, then they are entitled to be consulted,” he said.

Koko was referring to the R1.8bn the power utility agreed to give Exxaro to sink the shaft when the contract expires in 2023.  

He explained that if Exxaro had consulted Eskom before making its decision then there would have been a better understanding between the two parties.

“I think it is wrong, I think Eskom is being taken for a ride,” he said.

“I think in future, we will be assertive. We will demand our assets in the mines.”

He added that when dealing with mine closures in future, Eskom will approach the minister of public enterprise with a section 54 application for stoppage. This way, disposals of mines can be dealt with in a “clean way”, he said.

A “radically different” approach would be to give the assets to the trustees of the holding policy, and the mining company would be placed in a long-term joint venture contract. This would avoid retrenchments, which is currently the case.

When it comes to Anglo American, Eskom said there should be no misunderstanding regarding the ownership of the assets.

“There is no debate between Eskom and Anglo American on who owns what… We agree Eskom paid for assets. We have entitlement [to those assets] and should not be condemned for having that entitlement,” he said.

“They are our assets we will decide what we want to do with them.”

ALSO READ: Anglo shortlists bidders for its Eskom coal mines

He said this following reports that Anglo is shortlisting bidders for several of its coal mines, those selling coal to Eskom. This is R13.6bn worth of coal supply from Anglo, annually.

“We will not be difficult, but we will demand what belongs to us,” said Koko.

Read Fin24's top stories trending on Twitter:

eskom  |  exxaro  |  anglo american  |  energy  |  assets  |  coal
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