JOHANNESBURG, Nov 17 (Reuters) - Eskom will not pay Glencore’s South African unit more than 150 rand a tonne when a temporary coal contract ends on Nov. 30, the utility’s Chief Executive Officer, Brian Molefe, said on Tuesday.
“A contract is a contract,” Molefe told Reuters in an interview, referring to the agreement Eskom has with Glencore’s Optimum mine.
Under that contract, Optimum provides Eskom with 10 million tonnes a year at 150 rand a tonne, a rate the company says is less than the cost of production.
In previous contracts with coal suppliers, the utility paid for the running costs of mines for a guaranteed supply of coal at a pre-determined price, which Molefe said was not sustainable.
Eskom’s fleet of coal-fired power stations produce virtually all the electricity in Africa’s most industrialised economy. ($1 = 14.2848 rand) (Reporting by Peroshni Govender, Tiisetso Motsoeneng and James Macharia; Editing by Ed Cropley)