Eskom said on Thursday it stopped paying Optimum Coal Mine at the beginning of the month because the mine has failed to supply the agreed amount of coal to Eskom’s Hendrina Power Station.
The power utility made this revelation as workers at Optimum Coal Mine in Middelburg continued their strike for the second day over uncertainty about the future of the Gupta-owned mine.
The country’s commercial banks have cut ties with Gupta-owned companies – citing reputational risk – while the only bank which services the companies‚ Bank of Baroda‚ will exit South Africa at the end of March.
The workers at Optimum wanted assurances from their employer that they will be paid on Friday as the company is experiencing financial problems.
Optimum CEO George van der Merwe could not assure the employees that they would be paid on Friday and claimed that Eskom was sabotaging its operations by not paying Optimum.
However‚ Eskom spokesman Khulu Phasiwe said Optimum last supplied the power utility with coal on February 17 and the mine indicated to Eskom that it had difficulty in continuing the supply of coal.
“We have chosen not to pay Optimum in January as it had failed to supply the 370‚000 tons of coal per month as per service level agreement.
“Optimum has been failing consistently to supply us with the agreed quantity of coal. Because they failed to supply‚ we did not pay them. What we then did was to impose a penalty in terms of the service level agreement.”
Phasiwe said Optimum only supplied 118‚000 tons of coal for January.
“We imposed a fine of R105m for January‚ and their invoice for January was R52m. Because the penalty was higher than the invoice‚ it would have been reckless to extend money to a defaulting party‚” Phasiwe said.
Eskom said Optimum supplied 80% of the coal for the Hendrina power station‚ and the rest was supplied by smaller mining operators.
“We have asked the smaller companies to increase their output and we have also diverted coal from other power stations to Hendrina‚” Phasiwe said.
National Union of Mineworkers (NUM) spokesman Livhuwani Mammburu said because Optimum cannot commit to pay the workers their monthly salaries‚ they cannot go back to work.
Workers downed tools on Wednesday.
Mammburu said the workers presented Van der Merwe with a memorandum on Thursday expressing their concerns about the ownership of the mine and asking whether workers would be paid their monthly salaries.
He said Van der Merwe could not commit to ensuring that workers would be paid on time.
Mammburu said until their concerns were adequately addressed‚ workers would not go back to work.
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