Eskom set for battle over legal obligation as Gupta’s Tegeta threatens to halt coal supply

With the possibility of coal supply falling below a 20-day requirement at its Hendrina power station, rolling power cuts are implausible, said South Africa’s Eskom.

Power cuts in South Africa have not been the best for the country as power cuts from 2008-2015 knocked Africa’s most industrialized economic growth, hitting key industries and led to an increase of demand exceeding its capacity.

South African utility, Eskom was reported scrambling to source enough coal to feed one of the country’s major power stations after a dispute with its supplier‚ Gupta-owned Tegeta Exploration and Resources.

Leaked minutes of an Eskom meeting published by the AmaBhungane Centre for Investigative Journalism, show that the Gupta family threatened to halt coal supply because Tegeta wants Eskom to increase the amount it pays for coal.

“Tegeta’s threat to cut 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 1600 trucks full of coal” the report said.

As a confirmation, Eskom spokesperson Khulu Phasiwe said there was an emergency meeting to verify the amount of coal available at its stations following its coal supplier threats.

“If all of them are within 20 days and clearly we don’t have problems. But if we have Hendrina and other power stations that are below 20 days of coal supply, then clearly we’ll have a situation in our hands but so far we have no reason to panic” Phasiwe said.

“Coal supply at Eskom’s power stations stood at 74 days’ worth in March but fell to 25 days’ worth at Hendrina by October and may have fallen below a 20-day requirement since” Phasiwe said, adding that “the company is investigating whether supply at all 12 power stations complied with regulations requiring at least 20 days’ worth”.

Coal supply to the powering firm-Eskom, has been limited by Tegeta while exporting coal from its Optimum coal mine, alleged AmaBhungane, therefore  placing the country’s electricity supply under strain.

According to a spokesperson for Oakbay (Tegeta’s Parent company) “the company would likely comment on Friday”.

“If it happens that for some reason they are unable to supply us with coal then clearly it means that they would have breached the contract and therefore it becomes a legal matter,” Eskom’s Phasiwe said.