Eskom has rubbished reports that it “blindsided” Exxaro Resources by informing the company that its contract to supply coal to Arnot power station would not be renewed.
The electricity parastatal also denied claims that its decision to delay the awarding of the long-term contract until it had satisfied itself that all bidders met all the conditions stipulated in the tender was evidence that it was helping to bail out Tegeta’s new mine.
Tegeta is reportedly controlled by the Gupta family who have close links to President Jacob Zuma and have been accused of attempted state capture.
“Eskom would like to emphasise that all its contracting relationships are concluded on sound commercial principles and considerations. In addition‚ all the Tegeta coal contracts with Eskom have been extensively audited by various agencies‚ including National Treasury‚” Eskom said in a statement on Sunday.
It pointed out that the Exxaro’s 40-year contract with Eskom had not been cancelled as insinuated‚ but had expired at the end of December last year.
“In August last year Eskom issued a request for proposals (RFP)‚ and bids from all interested parties were received before the closing date of October 2015. The cost of coal at expiry was R1‚132/ton. The tonnages supplied under the contract were below contractual volumes necessitating Eskom to supplement the supply with other contracts to mitigate security of supply which was a continuous challenge.
“Exxaro has previously been quoted in media reports as saying that it has not submitted its bid‚ and so did Tegeta. Any suggestions that Eskom had ‘blindsided’ Exxaro are baseless‚ malicious and misleading‚” Eskom added.
It said the reported coal diversions to Arnot power station from the Optimum coal mine actually referred to the export grade coal that was not suitable for Hendrina power station.
“Optimum Coal Mine produces coal for both domestic and export markets. Because of the low commodity demand‚ Tegeta is selling some of that coal to Arnot. There’s nothing untoward about it.”
Eskom added that while the evaluation of the long-term contract was still under way‚ and expected to be completed in September this year‚ it had in the interim contracted seven suppliers to deliver coal to Arnot until September.
“Although the media has generally focused on one supplier‚ namely Tegeta‚ Eskom has named the other six suppliers as well‚ and they are: South32 (BECSA)‚ Exxaro‚ Glencore‚ Keaton Mining (Pty) Ltd‚ Hlagisa Mining‚ and Umsimbithi Mining.
“In April‚ four of the seven suppliers‚ namely Exxaro‚ Hlagisa‚ Umsimbithi and Tegeta remained supplying Arnot while the balance of the suppliers indicated were redirected to supply their original designated power stations‚” Eskom stated.
Eskom refutes allegations of 'blindsiding' Exxaro on Arnot coal contract
Eskom has rubbished reports that it “blindsided” Exxaro Resources by informing the company that its contract to supply coal to Arnot power station would not be renewed.
The electricity parastatal also denied claims that its decision to delay the awarding of the long-term contract until it had satisfied itself that all bidders met all the conditions stipulated in the tender was evidence that it was helping to bail out Tegeta’s new mine.
Tegeta is reportedly controlled by the Gupta family who have close links to President Jacob Zuma and have been accused of attempted state capture.
“Eskom would like to emphasise that all its contracting relationships are concluded on sound commercial principles and considerations. In addition‚ all the Tegeta coal contracts with Eskom have been extensively audited by various agencies‚ including National Treasury‚” Eskom said in a statement on Sunday.
It pointed out that the Exxaro’s 40-year contract with Eskom had not been cancelled as insinuated‚ but had expired at the end of December last year.
“In August last year Eskom issued a request for proposals (RFP)‚ and bids from all interested parties were received before the closing date of October 2015. The cost of coal at expiry was R1‚132/ton. The tonnages supplied under the contract were below contractual volumes necessitating Eskom to supplement the supply with other contracts to mitigate security of supply which was a continuous challenge.
“Exxaro has previously been quoted in media reports as saying that it has not submitted its bid‚ and so did Tegeta. Any suggestions that Eskom had ‘blindsided’ Exxaro are baseless‚ malicious and misleading‚” Eskom added.
It said the reported coal diversions to Arnot power station from the Optimum coal mine actually referred to the export grade coal that was not suitable for Hendrina power station.
“Optimum Coal Mine produces coal for both domestic and export markets. Because of the low commodity demand‚ Tegeta is selling some of that coal to Arnot. There’s nothing untoward about it.”
Eskom added that while the evaluation of the long-term contract was still under way‚ and expected to be completed in September this year‚ it had in the interim contracted seven suppliers to deliver coal to Arnot until September.
“Although the media has generally focused on one supplier‚ namely Tegeta‚ Eskom has named the other six suppliers as well‚ and they are: South32 (BECSA)‚ Exxaro‚ Glencore‚ Keaton Mining (Pty) Ltd‚ Hlagisa Mining‚ and Umsimbithi Mining.
“In April‚ four of the seven suppliers‚ namely Exxaro‚ Hlagisa‚ Umsimbithi and Tegeta remained supplying Arnot while the balance of the suppliers indicated were redirected to supply their original designated power stations‚” Eskom stated.
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