No 'Plan B' as Eskom coal supply suspended
Eskom does not have a contingency plan should coal supplies at its Hendrina Power Station be depleted, after administrators on Friday suspended a supply deal with Optimum Coal Mine.
Eskom spokesperson Khulu Phasiwe told Fin24 that while it was important to have a ‘Plan B’, the utility would devise one at a later stage.
Phasiwe said Hendrina Power Station, which pushes 2 000MW into the SA grid, had 40 days worth of coal supply.
Glencore has said that its Optimum Coal Mine was under financial strain because it was selling coal to Eskom for less than the cost of production.
Business rescue practitioners, Piers Marsden and Peter van den Steen, on Friday informed Eskom of the suspension of its coal supply agreement with Optimum.
"We believe that it will be in the best interests of all parties for a new agreement to be concluded between Eskom and Optimum mine," Marsden said in a statement.
"If Optimum mine is forced into liquidation it will result in interrupted coal supply to Eskom, job losses and other negative consequences and ultimately could result in substantially higher costs for Eskom."
The suspension of Optimum's agreement with Eskom comes at a time when SA is experiencing its worst power shortages in decades and economic growth is being stifled by load shedding.
In the event that Hendrina’s coal supplies were depleted, Phasiwe said a contingency plan might involve getting coal from another company.
According to Phasiwe the frequency of load shedding would not be impacted by the suspension.
"We will continue to run the power station without interruptions," he said.
Optimum's administrators were seeking a new contract in which Eskom agreed to pay a "cash cost of production" of between R400-R450 per ton of coal.
Under the current contract, which is valid till 2018, Optimum supplies coal to Eskom at R150 per ton.
Eskom’s legal team is currently considering the utility’s options for legal recourse.
Last year, we were only able to find seven franchises...
Nelson Mandela Bay Municipality Executive Mayor, Athol Trollip, on Wednesday announced that he has appointed Yolanda Faro as the new Metro Police Chief. She will take up her post on the 1st December 2016...
There is a heavy police presence at the National Assembly...
Stormers and Springboks lock-forward...
National Treasury on Wednesday announced the launch...
Police in Willowvale have appealed to the public for...
Just under 62% of people in Nelson Mandela Bay own...
Bloemfontein Celtic managed to succumb to a goalless 0-0...
Police in Willowvale have launched an investigation...
- TRUMPED! A home owner can be evicted as an unlawful occupier
- Port Elizabeth man arrested in connection with mystery murder at Pine Lodge Resort
- Panayiotou trial day 10 – Defence claims state ambushed them
- Kouga Municipality to clamp down on illegal car guards
- Volunteer campaign to support NMMU’s students launched