Coal. Picture: ROBERT TSHABALALA
Coal. Picture: ROBERT TSHABALALA

Coal producer Wescoal says the dismissal of all 274 contract mining employees at its Vanggatfontein mine following a violent strike will reduce its supply to Eskom in coming weeks.

SA’s power utility has been struggling to keep the lights on, in part due to a shortage of coal. Last week, documents showed that the government was forced to pay R5bn in emergency funds to Eskom.

Wescoal acquired the Vanggatfontein mine, which supplies Eskom and is operated by an outsourced mining contractor, when it bought Keaton Energy in July 2017.

Since a new contractor was appointed, “numerous unprotected industrial actions in the form of work stoppages, strike actions and riots have been taking place at Vanggatfontein on a regular basis”, Wescoal said on Wednesday.

The strike action turned violent on April 16, with equipment damaged and the mine’s entrance gate blocked.

The mining contractor obtained a court interdict against its employees at Vanggatfontein, and it was later determined that all contract mining employees there “are guilty as charged”, said Wescoal.

The contractor had since issued dismissal notices to all 274 contract mining employees at Vanggatfontein and would immediately start looking for replacement staff.

Production at the mine would be suspended for six to eight weeks, Wescoal said.

“The unlawful employee conduct has already resulted in significant negative financial impact on Wescoal,” it said.

The miner said production at the mine would be reduced by up to 20% of budgeted annual production in financial year 2020.

Wescoal said it had provided notice of force majeure to Eskom of its inability to continue supplying coal from the mine during the down time.

“Wescoal intends holding further discussions with Eskom shortly in order to address the impact of the Vanggatfontein supply shortfall to Eskom.”

hedleyn@businesslive.co.za