Power utility Eskom, which is in the middle of its own liquidity and coal supply crisis, is reportedly ready to vote on a plan that will see it pay double the price for half the amount of coal coming from the Gupta-owned Optimum coal mine.
Optimum, which is currently in business rescue, needs Eskom’s help to become profitable so it can be sold off.
According to the City Press, Eskom is willing to raise the price it pays for coal from the group to R450 per ton – more than double the R200 it currently pays – while Optimum wants to reduce the coal it will supply from 400,000 tons to 200,000 tons, the paper reported.
Optimum’s previous owners, Glencore, were forced to sell the mine after Eskom refused to renegotiate the coal contract prices, which opened the door for the Gupta-owned Tegeta to acquire the mine.
Eskom’s own crisis
Eskom itself is in the middle of its own liquidity crisis, where the group is facing mounting debt, and is struggling to meet coal demands at its power stations.
The group is also trying to hike electricity prices by as much as 30% in a bid to collect billions of rands from consumers, to plug the large hole in its books.
According to submissions made to Nersa for the tariff hikes, Eskom wants to recover as much as R66 billion which was lost in the ‘Gupta years’ – 2014 to 2017, the years highlighted in the Public Protector’s State of Capture report.
The shortfall is due to Eskom’s over-estimation of electricity sales and its overspend on coal, gas and imports during that period.
You can read the full report in the City Press for 29 April 2018