Union Rejects Exxaro Bid to End 2-Week South African Coal Strike

Exxaro Resources Ltd. (EXX) said the National Union of Mineworkers rejected proposals by South Africa’s second-biggest coal producer aimed at ending a two-week strike at six of its 11 coal operations.

The NUM dismissed an offer that included an incentive payment of 2 percent of a worker’s salary, or a minimum of about 2,000 rand ($217) for each Exxaro Coal, Exxaro Coal Mpumalanga and Exxaro Reductants employee, the Pretoria-based company said in an e-mailed statement.

“Although the proposal has been rejected, Exxaro is committed to continued engagement with its recognized trade unions in order to find a win-win solution,” it said. “This will avert the possible negative effect that a prolonged strike could have on Eskom’s electricity generation.”

Exxaro supplies all the power-station coal it mines to South African electricity utility Eskom Holdings SOC Ltd., which relies on coal for 80 percent of generation. The company has contingency plans to keep the plants affected by the stoppages running it said. The operations are Arnot, Matla, Grootegeluk, Leeuwpan, Inyanda and Reductants.

“The strike is still on and the workers are angry,” NUM branch secretary Mxolisi Hoboyi said by phone yesterday. They only want to hear about when they will be paid.’’

The company has approached the Labour Court to get an order to stop the strike, it said.

Eskom has 49 days of coal stocks across its system, Chief Executive Officer Brian Dames said in an interview on Johannesburg-based Talk Radio 702 yesterday. That is above the company’s 2012 target of 42 days. The utility is concerned about the Exxaro strike and wants to see resolution, he said.

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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