Production has ground to a halt at another operation of diversified mining house Exxaro Resources after unprotected strikes at two collieries spread to a third coal mine last week, raising fears of mounting pressure on Eskom’s fuel supply.
The illegal action hit Exxaro’s Grootgeluk coal mine in Limpopo on Thursday when 2 000 workers downed tools days after their colleagues from the Arnot and Matla mines in Mpumalanga went on a wildcat strike. Arnot and Matla employees had downed tools on Tuesday over the non-payment of performance bonuses.
Eskom was monitoring security of coal supply closely, in light of the context of a tight power system, it said on Friday.
“We do have concerns about the safety of staff and suppliers given the levels of violence and intimidation in the coal strikes,” Eskom said.
There is plenty of reason for Eskom to be concerned about the strike. Out of Grootgeluk’s 18.8 million tons of production each year, 14.8 million tons of coal is earmarked for Eskom’s Matimba power station.
The situation at Exxaro had become a serious problem because of the spread of the strike to Grootgeluk, XMP Consulting coal analyst Xavier Prevost said on Friday.
“Power stations could be seriously affected if the strike is not resolved soon because Exxaro produces a substantial amount of coal for Eskom,” Prevost said.
He added that Exxaro should inform the workers that the non-payment of performance bonuses was the consequence of a lacklustre coal market, with lower prices and decreased demand having resulted in Exxaro reporting a 33 percent decline in revenue last year.
Exxaro’s finance director, Wim de Klerk, said the strike at Grootgeluk and those at Matla and Arnot were not related. Contingency plans had been implemented to supply coal to Eskom power stations.
The Matla mine had 18 stock days of supply available and the Matla power station had two stock days of coal supply on hand.
At Arnot there was no risk to the supply of coal, De Klerk said on Friday.
He added that Grootegeluk had 14 stock days of supply for the Matimba power station, which also had 33 days of supply stockpiled.
“The mine also has reasonable supplies of coal for its other domestic and export customers,” De Klerk said.
Despite potential risks to electricity supply, workers have remained defiant.
“Employees will not return to work until they are paid performance bonuses. How can we not be paid when we were not even informed of what the performance targets are?” Mxolisi Hoboyi, the branch secretary at Arnot for the National Union of Mineworkers (NUM), said on Friday.
The company argued that Exxaro workers had not received performance bonuses because operations had not achieved their targets.
De Klerk said all employees and union representatives were given feedback on targets and what needed to be achieved to make up lost ground.
“Mail, SMS and face to face meetings are used for this,” De Klerk said.
The NUM represented 70 percent of employees at Exxaro operations, and Solidarity was also recognised. The Association of Mineworkers and Construction Union did not have a presence at its operations, the company said.
Exxaro shares fell 1.21 percent to R166.84 on Friday.