Following failed attempts by Optimum to renegotiate and extend the coal supply agreement for the Hendrina Power Station at prices higher than the R150 per ton contractual agreement, Optimum later proposed a “compromise deal”. In terms of the proposed deal, the coal supply agreement to the Hendrina power station would be renegotiated at R300 per ton until 2018, and thereafter be extended to 2023 at R570 per ton.
In a letter dated 30 June 2015, Optimum said: “The base price for the first period and second period shall be escalated on each anniversary of the base date in accordance with a price adjustment factor which is to be calculated in accordance with an escalation table to be agreed between Eskom and Optimum.”
In another letter dated 17 September 2015, when Optimum was under business rescue, they proposed a price increase of R630 per ton and a coal supply agreement extension until 2023.
In that letter, the business rescue practitioners proposed a coal price increase of R443 per ton with effect from 1 October 2015 to 31 December 2018. Thereafter the price would increase to R630 per ton until 2023.
Eskom was not involved in the sale agreement between Glencore and Tegeta. All Eskom was interested in was to ensure that the new owners were aware that the coal prices, volumes and quality would not be renegotiated or compromised, and that the penalties imposed on Optimum would not be waivered. Nothing has changed since then even though Optimum Coal Mine is under new management.