Eskom’s decision to stop buying coal from Exxaro’s Arnot mine in Mpumalanga will see 826 workers losing their jobs by the new year.
On Tuesday, Exxaro launched official retrenchment proceedings at the mine following a high-level meeting with Eskom executives, where the company was told the power utility would not extend its 40-year contract with the mine beyond December 31.
While negotiations between Eskom and Exxaro started in 2013 over the possibility of extending the contract, Eskom told the company in September that it was pulling the plug.
“We are not cancelling their contract; we’re allowing it to expire. It’s coming to an end in a natural way,” Eskom spokesperson Khulu Phasiwe said, adding that this was in line with the parastatal’s decision to get rid of all its cost-plus contracts.
On Friday, Exxaro said that attempts were being made to secure a meeting between Eskom CEO Brian Molefe and Exxaro CEO Sipho Nkosi.
The Arnot mine has been struggling with low production and high costs. Eskom said it was paying about R900 a ton, which is well above the average Eskom pays of R230.90 a ton.
On Wednesday, the National Union of Mineworkers marched to the mine, appealing to Eskom to renew Exxaro’s contract until 2032 and spare the country further job losses.
Phasiwe said Eskom was concerned about the potential job losses and was hoping some of the workers could be redeployed into Exxaro’s other operations.