Eskom says paying too much for coal

As coal giant Glencore begins business rescue process at its SA coal unit due to Eskom’s unreasonable supply contracts.

South Africa’s electricity utility Eskom said on Tuesday it would renegotiate contracts with coal suppliers because it was paying too much given a recent drop in commodity prices.

The comments come after mining giant Glencore said on Tuesday it was placing its Optimum coal operation in South Africa under “business rescue” due to Eskom’s unreasonable supply contracts.

Africa’s most advanced economy is in the midst of one of its worst ever electricity crisis as its ageing fleet of power plants struggles to meet demand. 

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So Eskom think they are paying too much for coal, and Glencore’s Optimum think Eskom are paying too little. Huh?

Eskom wants to re-negotiate only certain contracts, those they signed with Gupta at inflated prices are fine.
The price for coal already dropped by 71% since 2008 and is set to drop another 50% from current levels. So Eskom definitely has to re-negotiate. It is a real pity we as consumers cannot re-negotiate the price of electricity, for is should fall along with the price of coal.
I suppose the corruption and ineptitude at Luthuli House makes up the difference between the potentially much lower cost of electricity, and the current price.

Privatise Eskom and SAA it is long … overdue.

The first time eskom makes economic sense. Will the consumer benefit? after all it is a public institution right?

End of comments.

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