Question NW241 to the Minister of Public Enterprises

Reply:

1.  This question is answered below in two parts, i.e. what Eskom owns directly and

what Eskom owns indirectly. Eskom directly owns one mine, called Kilbarchan Colliery.

Eskom indirectly owns some equity in the cost plus mines as a result of ownership of a portion of the mine assets through the cost plus coal supply agreements (CSA) signed. Mining houses have the statutory right to mine the coal, and the statutory obligation to rehabilitate. Eskom, through the CSA has the financial obligation to pay for these costs. The reserves dedicated to Eskom, can only be sold to Eskom.

In a case where the mining house intends to transfer its rights and obligations Eskom would have to provide consent.It should be noted that the CSAs do not include BEE ownership requirements as the last cost plus agreement was signed prior to Eskom’s current BEE Policy.

(1)(a)(b) Table 1 below presents Eskom’s Cost Plus CSAs. The Colliery column (a) provides the names of the mines and the Mining House (b) column provides the information on who is mining the mine.

Table 1Eskom's current Cost Plus CSAs

	Colliery (a)	Mining House (b)	B-BBEE Status	Start of CSA	Current End of CSA	Power Station	Investment made by Eskom, from inception to date	Annual Contractual Volumes (ktons)
1	Kriel	Anglo	LME 8	Dec 1979	Dec 2019	Kriel	R2.4 bn	8 500
2	New Denmark[1]	Anglo	LME 8	Sept 1989	Sept 2029	Tutuka	R3.2 bn	10 000 per CSA 4 500 Assumed
3	New Vaal	Anglo	LME 8	June 1989	June 2029	Lethabo	R1.6 bn	17 800
4	Matla	Exxaro	BO LME 4	July 1983	July 2023	Matla	R2.2 bn	10 066
5	Khutala	South32	LME 8	Dec 1993	Dec 2033	Kendal	R1.6 bn	13 300
6	Arnot	Closed mine	BO LME 4	June 1981	Dec 2015	Arnot	R0.8 bn	-

2.  Kilbarchan Colliery is recorded in Eskom’s balance sheet under the subsidiary Natal Navigation Colliery. It is recorded at R1, while the associated rehabilitation liability has been fully raised in Eskom’s financial statements

On cost plus mines, these are not on Eskom’s balance sheet because the direct ownership rests with the mining houses and their balance sheets.

Remarks: Reply: Approved / Not Approved

Mr. Mogokare Richard Seleke Ms. Lynne Brown, MP

Director-General Minister of Public Enterprises

Date: Date:

1. PQ241 ↑