Effects of the change of the business model which Eskom has been using to purchase fuel for its operations will be felt by 1, 800 employees of Exxaro’s Arnot mine, which has since been shut down. All production has ceased and the mine equipment has been recovered from underground, Exxaro says in a statement.
According to Exxaro, Eskom didn’t renew a contract with Exxaro’s Arnot mine, which supplied a power plant by the same name for 40 years, at the end of December, and is using short-term supplies that are providing the fuel for less than what was stipulated in the agreement.
Exxaro says it expects to complete talks on job cuts in the third quarter. Meanwhile, all production has ceased and the mine equipment has been recovered from underground.
South Africa’s mining industry has been shedding jobs at an alarming rate, with producers of all commodities not spared. The job losses will add to the statistics of unemployment which recent information Statistics South Africa indicate it stands at 40% of the country’s economically active population.