Eskom does not have a contingency plan should coal supplies at its Hendrina Power Station be depleted, after administrators on Friday suspended a supply deal with Optimum Coal Mine.<\/p>\n
Eskom spokesperson Khulu Phasiwe told Fin24 that while it was important to have a \u2018Plan B\u2019, the utility would devise one at a later stage.<\/p>\n
Phasiwe said Hendrina Power Station, which pushes 2 000MW into the SA grid, had 40 days worth of coal supply.<\/p>\n
Glencore has said that its Optimum Coal Mine was under financial strain because it was selling coal to Eskom for less than the cost of production.<\/p>\n
Business rescue practitioners, Piers Marsden and Peter van den Steen, on Friday informed Eskom of the suspension of its coal supply agreement with Optimum.<\/p>\n
\u201cWe believe that it will be in the best interests of all parties for a new agreement to be concluded between Eskom and Optimum mine,\u201d Marsden said in a statement.<\/p>\n
Said Marsden: \u201cIf Optimum mine is forced into liquidation it will result in interrupted coal supply to Eskom, job losses and other negative consequences and ultimately could result in substantially higher costs for Eskom.\u201d<\/p>\n
The suspension of Optimum\u2019s agreement with Eskom comes at a time when SA is experiencing its worst power shortages in decades and economic growth is being stifled by load shedding.<\/p>\n
In the event that Hendrina\u2019s coal supplies were depleted, Phasiwe said a contingency plan might involve getting coal from another company.<\/p>\n
According to Phasiwe the frequency of load shedding would not be impacted by the suspension.<\/p>\n
\u201cWe will continue to run the power station without interruptions,\u201d he said.<\/p>\n
Optimum\u2019s administrators\u00a0were seeking a new contract in which Eskom agreed to pay a \u201ccash cost of production\u201d of between R400-R450 per ton of coal.<\/p>\n
Under the current contract, which is valid till 2018, Optimum supplies coal to Eskom at R150 per ton.<\/p>\n
Eskom\u2019s legal team is currently considering the utility\u2019s options for legal recourse.<\/p>\n