South Africa's Eskom says might shun Anglo American to look for cheaper coal - CNBC Africa

South Africa's Eskom says might shun Anglo American to look for cheaper coal

Southern Africa

by Reuters & CNBC Africa 0

South Africa's Eskom says might shun Anglo American to look for cheaper coal. Photo: Pexels.

South Africa's Eskom is paying too much for the coal it buys from one of Anglo American's mines and will shop around for a cheaper source, an executive at the power utility said on Tuesday.

"It's unacceptable and we will change and we will go to unconventional suppliers," Eskom's Group Executive for Generation Matshela Koko told reporters.

Anglo's New Denmark Colliery is the most expensive coal supplier to Eskom, Koko told Reuters.

Eskom's Tutuka power station was paying Anglo American 1,600 rand ($109) per tonne, said Koko.

European coal futures traded around $58.90 per tonne at 1030 GMT.

Eskom, which had faced a funding shortfall and struggled to keep the lights on in Africa's most industrialised economy, said it posted a net profit of 4.6 billion rand in the year to March from 0.2 billion rand in the previous year.

The utility also said it had secured 57 percent of the funding for its 2016/2017 financial year.

Eskom had received 23 billion rand in the 2015/2016 financial year which ended in March through government loans and an equity injection.($1 = 14.7218 rand) (Reporting by Zandi Shabalala; Writing by TJ Strydom; Editing by James Macharia)

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