Optimum Coal Mine to resume supply to Eskom after securing R1bn funding
Kurt Knoop and Johann Louis Klopper, who were appointed as rescuers in February 2018, told Business Report this week that they had accepted an offer from an investor.
Knoop said the investor would provide funding and post commencement finance to resume operations before the end of the month. He said negotiations between the business rescuers and Eskom management for coal supply were at an advanced stage and both parties would be signing agreements soon.
“It’s a brand new agreement,” Knoop said. “The old agreement came to an end in December 2018,” he said, noting that the quantity of coal supply to Eskom would be agreed upon during the ongoing negotiations.
The developments come as Eskom battles intermittent power cuts across the country which have forced the utility implementing stage 4 load shedding to stabilise the grid.
Eskom was not immediately available for comment.
The National Union of Mineworkers (NUM) Highveld regional chairperson Nelson Ratshoshi said the union welcomed any funding that would revive operations at Optimum.
Ratshoshi said business rescue had dragged on for more than a year now affecting 2000 workers at the mine.
He said most workers had their houses and cars repossessed by the banks as a result of the business rescue process. “Our position is clear: We have been saying anyone who has money must come and rescue that business,” said Ratshoshi. “This thing has affected township businesses as well, because mineworkers account for huge buying power around the communities they work in.”
Optimum has been front and centre of allegations into state capture.
Former business rescuer Piers Marsden told the Zondo Commission of Inquiry last week that the mine was experiencing cash flow problems and that it had exhausted all its resources when he arrived in 2015. Marsden also confirmed that Eskom wanted the contract to continue running, but that a decision was taken to suspend the supply of coal to Eskom.
He said Eskom had defaulted on two months of payments and advised that Optimum be sold to Eskom or to a third party, among other options, adding that the mine had relied on its holding company Optimum Coal Holdings for survival.
“It was in business rescue and was in financial distress,” said Marsden.