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Exxaro Strikes Spread to Two More S. African Coal Mines

March 11 (Bloomberg) -- Strikes at three South African coal mines owned by Exxaro Resources Ltd., the country’s second-biggest producer of the fuel, have spread to two more operations, the company said.

Production stopped at the Inyanda mine in the Mpumalanga province today, while output halted at the Leeuwpan colliery on March 9, Pretoria, South Africa-based Exxaro said in an e-mailed statement. The strikes about non-payment of bonuses that started at the Arnot and Matla operations on March 5 continue, as does the stoppage at the Grootegeluk colliery on March 8, it said.

“The strikes are still on and they are intensifying,” Mxolisi Hoboyi, a branch secretary with the National Union of Mineworkers, said by mobile phone today. “There is a big possibility that the strikes will catch on all of Exxaro before the end of this week if a solution is not found soon.”

Grootegeluk is ramping up output of the fuel to supply Medupi, the 4,800-megawatt plant that will be the world’s fourth-largest using coal. The mine has adequate supply for South African power utility Eskom Holdings SOC Ltd.’s 3,990-megawatt Matimba station. There are also sufficient stocks to supply the Arnot and Matla plants, which have installed capacities of 2,100 megawatts and 3,600 megawatts respectively, according to Eskom’s website.

Supply Concern

“We would be concerned over security of supply in the event of a prolonged strike,” Hilary Joffe, a spokeswoman for Eskom, said by phone. “We are working with Exxaro to monitor the situation.”

Exxaro’s projected total spending for Grootegeluk has increased by 700 million rand ($77 million) to 10.2 billion rand because of labor unrest, steel shortages, and additional scope that’s been added to the project, the company said in a statement on March 7.

All power-station coal Exxaro produces is supplied to Eskom and municipal plants in the country, the company said on its website. The company has 11 coal operations.

“No incidents of violence have been reported to me; currently the strike is peaceful,” Executive General Manager of Human Resources Retha Piater said by phone. She declined to say what the company’s contingency plans are.

The shares rose for the first time in four days, adding 1.8 percent to 169.90 rand in Johannesburg. About 442,000 shares, or 48 percent of the daily average over the past three months, changed hands.

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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