The National Union of Mineworkers (NUM) on Friday expressed its disappointment over the standoff between coal miner Exxaro and State-owned Eskom regarding the possible closure of Exxaro’s Arnot coal mine, in Mpumalanga, which was no closer to being resolved.

This followed reports on Thursday that the two parties appeared to be heading for arbitration on the Arnot coal supply contract. Outgoing Exxaro CEO Sipho Nkosi said Eskom’s failure to buy surface rights had resulted in a production decline and increased mining costs at the cost-plus mine.

Simultaneously, Eskom put out a media release stating that it was regrettable for Exxaro, as the owner of the mining rights, to close the mine without fully exploring economically viable options.

Eskom added that it had engaged with Exxaro over a period of two years on the high R900/t cost of coal from Arnot and the need for Exxaro to consider viable options to reduce this cost for the benefit of the South African consumer.

Nkosi countered, however, that, prior to ceasing production at Arnot in December, Exxaro had proposed a plan to increase production, reduce mining costs to R450/t and extend the supply contract beyond 2015.

“Both are at fault on this matter.  Exxaro acted recklessly, as it knew that the contract with Eskom was coming to an end in December 2015. Why did they not submit the tender in August when it was opened by Eskom?” NUM asked in a statement.

It further stated that it did not understand why Exxaro decided to issue a Section 189 notification, without examining other options that would save the 1 800 jobs that were at stake. “We are disappointed that Exxaro only submitted the tender to Eskom in February this year,” it noted.

NUM deputy general secretary William Mabapa added that the union’s members were facing a bleak future. “This is a calamity. We view this as a serious concern taking into account that the country’s unemployment rate is 25%," he said.