Glencore held gun to our head - Eskom CEO

Feb 03 2016 18:38
Franz Wild, Antony Sguazzin and Paul Burkhardt

Johannesburg - Eskom CEO Brian Molefe said he felt as if there was “a gun to our head” in negotiations with Glencore over a coal supply contract that the Swiss mining and trading company said it couldn’t honor because the price was too low.

READ:   Eskom can't afford exorbitant coal - Molefe

Glencore last year placed its Optimum coal unit in business rescue proceedings, a form of bankruptcy, after Eskom fined it under the terms of a contract it had to supply the Hendrina power plant and refused to negotiate over a price of R150 per metric ton specified in a contract that runs until 2018.

Eskom has said Glencore asked for R530 per ton.

The mine is now in the process of being sold to Tegeta Exploration & Resources for R2.15bn. Tegeta is controlled by the Gupta family, who are in business with a son of President Jacob Zuma.

READ:    Gupta connection cloud over Eskom coal supplier

Eskom refused to increase the coal contract price in July, after four months of intermittent power cuts across the country due to inadequate generation capacity.

Glencore said that if it stopped supplying coal to Hendrina it would cause further electricity outages, known as load shedding in South Africa.

Glencore declined to comment when called by Bloomberg.

“I believe that right or wrong, the intention was to cause load shedding,” Molefe said. “I didn’t feel good about Glencore and the way they did business.”

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

glencore  |  eskom  |  brian molefe  |  electricity  |  load shedding



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What’s on your gift list this Christmas?

Previous results · Suggest a vote