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Eskom has interim coal suppliers for Arnot plant

Cash-strapped Eskom is cracking down on its contracts with coal suppliers.

Eskom's chairperson Zola Tsotsi revealed the power utility will be suspending four executives as part of an independent inquiry into the business at Megawatt Park in Johannesburg on 12 March 2015. Picture: Reinart Toerien/EWN
eskom,Exxaro Resources Limited,Eskom unsuitable coal
Local Business

JOHANNESBURG - Power utility Eskom said on Friday it had seven interim suppliers to provide it with coal while it searches for new sources for its 2,100 megawatt Arnot plant after it allowed its 40-year contract with Exxaro Resources to lapse.

“Eskom, following its standard tendering process approached the open market in an effort to identify cost-efficient suppliers to provide coal to Arnot Power Station,” the state-run utility said in a statement.

“In order to ensure business continuity of Arnot, Eskom has responsibly sourced coal from seven interim suppliers. All interim suppliers deliver coal significantly below the previous Exxaro price - further demonstrating the correctness of Eskom’s decision to seek a new supplier,” it said.

Cash-strapped Eskom is cracking down on its contracts with coal suppliers, saying previous agreements for guaranteed supply at a pre-determined price were no longer sustainable.

Eskom had said in December it might not renew its agreement with Exxaro, which expired on the last day of 2015.

Over 80 percent of South Africa’s power comes from coal and Eskom, which faces a cash crunch, is scrambling to keep the lights on in Africa’s most advanced economy.

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