News / South Africa

Yadhana Jadoo
2 minute read
1 Dec 2017
6:53 am

Tegeta’s coal-cut threat is ‘coercion’

Yadhana Jadoo

Eskom in a corner after miscalculating stockpile amid higher price demand.

Eskom power station (File pic: Eskom website)

Gupta-owned Tegeta Exploration and Resources’ threat to cut off the coal supply to Hendrina power station unless Eskom pays more for it is extortion and may cause load shedding again, according to the Organisation Undoing Tax Abuse (Outa).

Outa said it’s up to Eskom and Public Enterprises Minister Lynne Brown to take action against Tegeta and to get to the bottom of the “dwindling coal stock supplies”.

Reports from the amaBhungane Centre for Investigative Journalism indicated that Tegeta, which is also part-owned by President Jacob Zuma’s son Duduzane and Trillian founder Salim Essa, made this threat last Friday.

The company threatened to shut down conveyor belts to Hendrina power station if Eskom did not increase the R150 per ton it pays to Tegata for coal from Optimum mine, it reported.

Eskom, in turn, threatened to take legal action. According to leaked minutes from an Eskom meeting on Friday: “Legal counsel was instructed to prepare the interdict and a meeting was held with [Tegeta] this morning to discuss actions to be taken.

“Verbal commitment [were] made by [Tegeta] at 12.30pm thatthey will not stop the conveyor belt to [Hendrina].

“Eskom requested written confirmation by 3pm today. If it is not delivered, urgent legal action will be taken,” the minutes read.

AmaBhungane added: “Tegeta’s threat to cut the coal supply came just as Eskom discovered a massive miscalculation that over-estimated the size of Hendrina’s strategic coal stockpile.

“Instead of the 26 days of coal Eskom thought it had for Hendrina, the actual figure as of Monday last week was just 10 days.

“The missing 18 days’ of coal amounts to more than 50 000 tons – or just over 1 600 trucks full of coal.”

Outa chairperson Wayne Duvenage said this also showed up Eskom’s poor operations leadership, adding: “We trust Eskom will take action against their extortionist conduct.”

He added: “There is no excuse for this late realisation that coal stock supplies are well below the critical levels.

These are simple operational controls that basic management should be able to detect.

“We call on Minister Brown to implement an independent inquiry into the leadership and possible fraud surrounding this serious issue.

“It seems to be a threat to get [paid] more for their coal, which could result in load shedding.”


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