Hendrina Power Station, which supplies 2 000 MW of power to the national grid, has only got 40 days of coal supply left.
This following the suspension of the agreement between Optimum Coal Mine and Eskom.
Glencore has said that Optimum Coal Mine, which supplies Eskom with 5.5 million tons a year, is under financial strain because it was selling coal to Eskom for less than the cost of production. Optimum has since applied for business rescue.
South Africa’s business rescue law allows a financially distressed company to temporarily delay creditors’ claims against it or its assets.
Optimum has offered to temporarily supply coal to Eskom at the cost of production, higher than what Eskom currently pays, while a new deal is negotiated.
There is a a very real risk that power being supplied from this station could be interrupted.
This would have severe consequences for the South African economy, as it would most likely increase load-shedding.
Hendrina Power Station is one of Eskom’s oldest continuously running power stations and was built in 1976.
The power station is situated about 40 kilometres from Middelburg, Mpumalanga and has approximately 1 000 employees.