JOHANNESBURG (miningweekly.com) – Coal miner Exxaro is continuing discussions with parastatal Eskom to reach a joint closure solution for the Arnot mine, as prescribed in its coal supply agreement.

The miner said in a statement late on Tuesday that during a high-level meeting between senior executives of the parties on November 30, Eskom confirmed verbally that it would no longer be offtaking any coal from the Arnot mine after December 31.

Exxaro had been supplying coal from the Arnot mine to the Arnot power station, in Mpumalanga.

In September, Eskom instructed Exxaro to start the process of closing the Arnot mine.

Exxaro noted that as it was only a mining rightholder and that Eskom owned the Arnot mine’s movable and immovable assets, Eskom would ultimately be liable to defray all costs related and incidental to the closure of the mine.

The National Union of Mineworkers (NUM) on Tuesday expressed concern over the potential closure of the mine and stated that it would march on Wednesday afternoon to hand over a memorandum of grievances to the mine management.

It added that more than 1 700 employees were at risk of losing their jobs if Eskom did not renew the coal supply contract. This would affect about 10 000 lives, the union added.

As such, the NUM demanded that the contract be renewed with the same conditions to prevent job losses; that Eskom hand over the contract that talks to the life span of the mine up until 2032 for job security and that Eskom respect a ten-point agreement signed by government and business in August.

The union also called on government to intervene to prevent job losses.
Eskom on Tuesday said it had contractual terms, which included production and cost targets, with all its suppliers, who were required to adhere to the terms set out in their agreements with Eskom.

"Despite various meetings and commitments, Arnot mine has still not been able to meet its production targets and Exxaro has not been able to address these issues. This has forced Eskom to allow this contract to expire and to seek an alternative supplier at a lower price."

The power utility, therefore, in August, started a public procurement process to find an alternative coal supplier for the Arnot power station.

It added that Exxaro had been given the opportunity to submit a bid like any other potential supplier. The bids were under evaluation at present and the successful supplier or suppliers would be announced when the process had been completed.