NUM threatens strike over Arnot, Optimum coal contracts

The National Union of Mineworkers (NUM) threatened on Monday to embark on “a massive national strike” unless Eskom addressed its unhappiness over the cancellation of certain coal supply agreements, including one with Exxaro’s Arnot mine, in Mpumalanga.

Deputy general secretary William Mabapa described the cancellation of a supply agreement with the cost-plus, tied colliery as calamitous.

Eskom was also fingered as being the main belligerent in an ongoing standoff with Optimum colliery, which supplies the Hendrina power station. Optimum entered business rescue earlier in the year.

Eskom insists that Optimum, which is owned by Glencore, needs to honour an agreement to supply coal at R150/t until 2018 and had also instituted claims against the company for R1-billion. The rescue practitioners and Glencore have described the arrangement as unsustainable.

However, a temporary supply agreement concluded until the end of November has since been extended by the practitioners until the end of December.

Exxaro is also at odds with the utility over its notice to terminate a coal supply agreement on December 31, noting that the cancellation notice was delivered amid ongoing negotiations on jointly optimising Arnot’s operations for the supply of coal beyond 2015.

But Eskom said that, despite various meetings and commitments, Arnot had failed to meet production targets, which had forced it to allow this contract to expire and to seek an alternative supplier at a lower price.

A request for proposal was initiated in August 2015 to secure alternative supply for Arnot and bids were currently being evaluated.

Eskom spokesperson Khulu Phasiwe told Engineering News Online that the winning bidder would be announced during the first quarter of 2016 and that Eskom would enter into ad hoc supply agreements from January 1 until the new arrangement was finalised.

Eskom also disputed Exxaro claims that the mine belonged to the utility, with Phasiwe stating that Eskom did not own any of the six tied collieries still in its portfolio and had provided funding in order to secure supply not ownership.

Nevertheless, he confirmed that the group’s lawyers were reviewing the 40-year contract to understand Exxaro’s assertion that it was “only a mining right holder and Eskom owns the Arnot mine movable and immovable assets and, therefore, Eskom will ultimately be liable to defray all costs related and incidental to the closure of the Arnot mine”.

The NUM was particularly aggrieved with the approach being taken by Eskom CEO Brian Molefe, whom the union said was “shedding jobs” as he had at fellow State-owned company Transnet.

“Our members are facing a bleak future and there are possible job losses of 1 139 permanent employees excluding contractors with 546 employees at Exxaro Arnot coal mine. This is a calamity,” Mabapa said.

“The NUM will embark on a massive national strike to Eskom head office if Brian Molefe does not address concerns of our members,” he added, noting that Molefe had hitherto failed to respond to several letters requesting a meeting.

Phasiwe confirmed that a letter had been sent to Molefe requesting a meeting, but that it had not been possible to schedule a meeting prior to Molefe having gone on leave. However, efforts were under way to ensure that a meeting took place during the course of the current week.