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Two unions have slammed Eskom for entering into a costly coal-supply deal with Seriti Resources and South32 SA Energy Coal Holdings.
The unions took issue with Eskom renegotiating coal-supply deals upward while pleading poverty to employees asking for wage increases.
South32 invoked a hardship clause in its agreement with Eskom as it was supplying Duvha station with coal at a loss.
The National Union of Mineworkers (NUM) and the National Union of Metalworkers of SA (Numsa) jointly slammed Eskom for entering into a costly coal-supply contract with Seriti Resources and South32 SA Energy Coal Holdings, while pleading poverty to employees asking for wage increases.
Matshela Koko, Eskom’s former group CEO, told the Zondo Commission on Wednesday that Johann Bester, Eskom’s GM for fuel sourcing, resigned from the power utility because he didn’t want to explain what happened during contract negotiations with Optimum Coal Mine.
Around 2014 Bester told Koko about Optimum’s “hardships” and that the coal mine wanted to increase the price it charged Eskom for coal, from R154 per tonne to R255 per tonne, said Koko. He told the commission that the board gave its approval for negotiations to start and said the team should negotiate for between R196 and R296 per tonne.
Seriti Resources said on Monday that all of the hurdles had now been cleared to allow it to acquire the coal assets of South32 SA. The final hurdle was Eskom’s consent to a new coal supply agreement at its Duvha Power Station.
The deal was initially inked in November 2019, but some acquisitions take time. The sale is now expected to be completed on 1 June, with Seriti acquiring the majority stake in South32 SA Energy Coal Holdings (Pty) Ltd (SAEC).
“Eskom has agreed to amend the existing terms and conditions stipulated in the Duvha Coal Supply Agreement, which is currently loss-making, adjusting the coal price to R550 per ton with effect from 1 June 2021, with an annual escalation (from 1 January 2022) in line with the Producer Price Index. The agreement will run until 31 December 2024,” Seriti said in a statement.
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