Gupta dealings could cost SA thousands of jobs: Solidarity
Trade union Solidarity believes that as many as 1,700 Exxaro mine employees could lose their jobs due to government’s politicking with the Gupta family.
It comes after a 40-year contract held by Exxaro, with Eskom, to supply coal to the Arnot power station, expired
Bloomberg reported last week that Eskom was buying coal for the plant from a mine that it said was being bought by a company controlled by the Gupta family – who are friends with President Jacob Zuma.
Bloomberg cited three people with knowledge of the situation, who said Optimum Coal had been supplying coal to Arnot since the beginning of the year.
Optimum Coal was being acquired by a company controlled by the Guptas, according to the report.
Eskom hit back in a statement on Friday saying that it was unable to renew the contract with Exxaro ‘due to the exorbitant coal price as well as the mine supplying below the contractual requirement’.
Eskom said it followed its standard tendering process and approached the open market.
The company said it previously stated that this process would be completed in March 2016 and has all intentions of completing by this date.
“As such, the process has not yet been finalised and therefore no contract has been awarded, any speculation contrary to this is therefore incorrect and mischievous.”
Solidarity said that unions are now involved in a process with the Exxaro management to assist the maximum number of affected workers who stand to lose their jobs because of the closing of the shaft in Mpumalanga.
“The fact that government is prepared to put so many workers’ income on the line just in order to strengthen its ties with the Gupta family, is regrettable,” said Deon Reyneke, deputy general secretary of energy at Solidarity.
“Furthermore, it is very sad to recall the earlier statement to trade unions that the Arnot power station was not connected to the Guptas.”
Eskom’s group executive for generation, Matshela Koko, said on Friday that to ensure the business continuity of Arnot, Eskom had sourced coal from seven interim suppliers.
One of these suppliers is Optimum, which provided less than 15% of the coal delivered to Arnot in January.
“All interim suppliers deliver coal significantly below the previous Exxaro price – further demonstrating the correctness of Eskom’s decision to seek a new supplier,” he said.
“Eskom is unapologetic about engaging with any supplier, irrespective of ownership. As such, Eskom will fulfill its mandate and assess suppliers only on their ability to provide coal on negotiated terms and conditions, irrespective of any perceived political connections,” Koko said.
Eskom stressed that it had proactively engaged with Exxaro on improving its performance, since 2012. “However these efforts were unsuccessful.”
Reyneke said that it was government dragging its feet that caused Exxaro to miss the necessary licence for further coal mining. “Government dawdled for two years over issuing a mining licence to Exxaro – who at the time would have been able to supply Eskom with coal at a much lower price.
The National Union of Mineworkers (NUM) said in December that over 1,600 jobs were on the line at Exxaro, following the contract loss in Mpumalanga.
ENCA reported that Exxaro is still in discussions with the mineral resources department regarding the mining licence it still holds.
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