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Optimum mine cuts Eskom’s coal supply

Two weeks ago Glencore said Eskom was paying less than the production price of the coal it was buying.

FILE: Optimum coal mine is stopping coal deliveries to Eskom's Hendrina power station in Mpumalanga. Picture: Reinart Toerien/EWN.

JOHANNESBURG - The business rescue administrators of the Optimum coal mine said they have told Eskom the mine will no longer supply the utility's Hendrina Power Station in Mpumalanga.

They said they are stopping the coal deliveries because they are allowed to suspend 'onerous' contracts in their bid to rescue the mine.

Mining giant Glencore put the mine into administration two weeks ago, saying that Eskom was paying less than the production price of the coal it was buying.

The Hendrina Power Station produces around 2,000 megawatts of power.

Meanwhile, Eskom said the national grid is stable at the moment.

Earlier this month, Eskom said it was seeking a R2 billion penalty from the mine, due to poor quality coal.

The ailing power utility released its annual results in Johannesburg, saying it managed to raise R49,5 billion through external funding.

But the parastatal wanted its power stations to perform better and was seeking a penalty payment from Glencore's Optimum Coal Mine.

Eskom's acting CEO Brian Molefe said it wanted Glencore to pay R2 billion in penalties for supplying poor quality coal which has resulted in shoddy performance.