Eskom cancels coal supplier contract

Wednesday, March 29, 2017

Pretoria - Eskom has cancelled a coal supplier contract due to the supplier’s consistent supply of inferior coal.

“Following the strict monitoring of the coal quality of all its suppliers delivering coal to its Tutuka power station, Eskom has cancelled its contractual relationship with Just Coal CC, a majority supplier of coal to the power station, due its consistent supply of inferior coal,” said the power utility on Tuesday.

After numerous site visits to the contracted collieries, it was determined that coal supplied to the Tutuka power station by Just Coal CC was not extracted from the contracted collieries.

“This is in breach of its contractual obligations to Eskom. The result is that Eskom is burning an unknown combustion characteristic coal resource at its Tutuka power station, potentially resulting in load losses,” said Eskom’s Interim Group Chief Executive Matshela Koko.

Koko said in an effort to resolve the issue, Eskom requested technical information such as mine layouts and in situ coal qualities from Just Coal CC.  However, the information provided did not adequately address Eskom's concerns.

“On 16 March 2017, we had placed Just Coal in breach of its contractual obligations and requested additional technical information. We then afforded them until 23 March 2017 to provide the technical information and remedy the breach and they failed to do so.

“Eskom is intolerant of any deviations from the prescribed standards and processes. This, quite plainly, amounts to corruption, which we cannot condone in any part our business. As a State entity, there is an innate expectation to be prudent and corruption-free in how we conduct our business.” -

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