Eskom ‘bombshell’ puts 1000 jobs on the line

(Gianluigi Guercia, AFP)
(Gianluigi Guercia, AFP)

Johannesburg - More than 1 000 employees of a Mpumalanga coal mine stand to lose their jobs when the mine’s contract with Eskom expires next month.

On Tuesday, employees of Exxaro’s Arnot Coal Mine are due to march to the company’s offices to voice their anger and frustrations with Eskom.

The National Union of Mineworkers (NUM) said Eskom dropped a bombshell on its members in September when it wrote to Exxaro to inform it that the mine’s 40-year contract would lapse at the end of December.

The letter, dated September 8 this year and signed by Eskom’s senior manager for coal operations, Petros Mazibuko, says it “serves as a reminder that the expiry date of the CSA [coal supply agreement] is 31 December 2015” and asks Exxaro to address numerous issues, including “mine closure and other related costs”.

The NUM’s branch secretary, Mxolisi Hoboyi, said negotiations to extend the contract beyond 2015 started in 2013 and the union thought this was still the case.

“The first information was given to us in mid-September,” he said. “The executive leadership was at Arnot and we were informed by HR that there was an urgent meeting convened at the mine manager’s office. It was then that we were informed about the letter – the letter was received a week before.”

On November 4, the union wrote to Eskom CEO Brian Molefe requesting an urgent meeting to discuss the potential loss of 1 139 permanent jobs, as well as the jobs of 546 contractors.

The letter says: “We view this as a serious concern, taking into account the current rate of unemployment in the country, which is 25%.

“We are humbly requesting your office to prioritise an urgent meeting with the NUM leadership to discuss this matter further.”

Hoboyi said: “Up to this day, Brian Molefe has not responded.”

Arnot is a cost-plus mine, meaning that Eskom pays the costs of the mine and Exxaro earns a management fee.

Traditionally, this arrangement has worked in Eskom’s favour, but as production has declined at Arnot, the mine has struggled to meet its delivery target of an annual 5 million tons to Eskom’s 2 100 megawatt Arnot power station and costs have rapidly escalated.

“We’re marching to the mine, but the target of the memorandum is government and Eskom.

“Government must intervene to save these 1 700 jobs. Eskom must do the honourable thing and give Exxaro an extension of the contract,” said Hoboyi.

Although Eskom had issued a formal request for proposal for new suppliers for Arnot in August, Eskom and Exxaro confirmed this week that discussions were still ongoing.

“The negotiations … are at a very sensitive stage and therefore we are not in a position to provide any further details until this matter has been resolved,” Eskom spokesperson Khulu Phasiwe said on Thursday night.

Exxaro’s Mzila Mthenjane said on Friday: “We are still in discussions with Eskom on the issue. We are conscious and concerned about the potential for negative consequences on Arnot mine employees. We hope to resolve the issues … through discussions with Eskom in a mutually favourable way.”

Eskom added that it expected all negotiations to be finalised by the end of December, but would not elaborate on what this meant.

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