Wescoal says Eskom declares force majeure on coal supply agreements

Mining company Wescoal said on Tuesday it had received letters from Eskom declaring force majeure on coal supply agreements for its power stations due to a nationwide lockdown to curb the spread of the coronavirus.

Wescoal said the notification said the force majeure would apply from April, 16 until one month after national lockdown has been completely lifted.

The government imposed a nationwide lockdown on March 27 and it has been extended until the end of April.

South Africa‘s struggling state-owned utility Eskom said on Monday it had sent letters to its coal suppliers warning that it could declare force majeure because of low demand.

“The indications and extent of the reduced coal offtake by Eskom are as yet unquantifiable, therefore the potential impact on Wescoal cannot be quantified until discussions with Eskom have been concluded,” Wescoal said.

Exxaro Resources also said on Monday its subsidiary Exxaro Coal, had received letters declaring force majeure on the coal supply agreements for the supply of coal to Eskom’s Medupi and Matimba power stations.