A mine linked to the Gupta family has not been awarded a contract to supply coal for the Arnot power plant, Eskom has said.

This after it was reported on Friday that state-owned Eskom was buying coal for its Arnot power plant from a mine that’s being bought by a company controlled by the Gupta family - who are friends of President Jacob Zuma - after a 40-year contract with Exxaro Resources was cancelled.

This was according to three people with knowledge of the situation, who said Optimum Coal had been supplying coal to Arnot since the beginning of the year, Bloomberg reported.

Optimum Coal was being acquired by a company controlled by the Guptas, according to the report.

Eskom’s Group Executive for Generation Matshela Koko said in a statement that speculation that the contract had already been issued was incorrect and mischievous.

He said Eskom had previously stated that this process would be completed in March 2016 and had full intentions of meeting this deadline.

Eskom didn’t renew Exxaro’s contract to supply Arnot from a nearby mine at the end of December, because of "the exorbitant coal price, as well as the mine supplying below the contractual requirement".

Koko said, to ensure the business continuity of Arnot, Eskom had sourced coal from seven interim suppliers. One of these suppliers was Optimum, which had provided less than 15% of the coal delivered to Arnot in January, the utility said.

"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.

He said they were dismayed by accusations linking the purchase of coal from Optimum to a change of ownership.

"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.

Fin24