Union Seeks Buyer for Arnot Mine to Save South African Jobs

  • National Union of Mineworkers says about 600 job cuts coming
  • Union says interest shown by companies in acquiring mine

A South African union is seeking a buyer to step in at Exxaro Resource Ltd.’s Arnot mine operations to avert job cuts expected at the end of July after the expiry of a coal-supply contract with Eskom Holdings SOC Ltd., the state electricity company.

“The relationship between Eskom and Exxaro is no longer viable so that is why we are saying we are looking for someone that is going to be able to take over,” National Union of Mineworkers Branch Secretary Mxolisi Hoboyi said by phone on Tuesday. “We will support whoever takes over the mine, irrespective of who that company is.”

About 600 workers will probably lose their jobs at the end of July, with the remainder of 1,200 employees phased out by 2020, he said.

Eskom and Exxaro have blamed each other for not being able to extend the 40-year supply contract for the Arnot power plant past its expiration at the end of last year. One of the seven temporary suppliers is Optimum, a mining company bought by Tegeta Exploration & Resources Pty Ltd., a company controlled by the Gupta family, who are associated with South African President Jacob Zuma.

Eskom doesn’t have any outstanding issues with Exxaro, Khulu Phasiwe, a spokesman for the utility, said by phone. There is a short list of five suppliers for the long-term Arnot power plant contract and Tegeta isn’t among them, and more than one supplier may be chosen for the 5 million tons per year needed by the plant, he said.

Exxaro and labor unions signed an agreement on the mine closing, Mzila Mthenjane, a company spokesman, said in an e-mailed response to questions on Wednesday. As many as 565 jobs will be cut after about 100 employees were transferred to other units and some workers took voluntary severance packages, he said.

The company does not own the assets, the utility does, “and therefore it is not for Exxaro to sell,” Mthenjane said.

While the union has agreed that Exxaro workers will receive severance payments, its optimistic that a buyer will be found, Hoboyi said. “There are certain companies, unfortunately I cannot disclose now, that are having an interest in buying Arnot,” he said.

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