Bloomberg News

Exxaro Strike Spreads to Mine Supplying S. Africa’s Medupi Plant

March 08, 2013

A strike at two South African coal mines owned by Exxaro Resources Ltd. (EXX) spread to a third operation that supplies what will be the world’s fourth-biggest coal-fired power plant, a union official said.

All employees at the Grootegeluk mine in the northern Limpopo province have stopped work today in protest over the payment of bonuses, Mxolisi Hoboyi, a branch secretary with the National Union of Mineworkers, said by mobile phone today. The union didn’t initiate the strike.

“They will go to work when they’re told when their bonus will be paid,” he said.

Grootegeluk, which employs about 2,000 people, provides South African power utility Eskom Holdings SOC Ltd. with coal for its Matimba station and is ramping up output of the fuel to supply Medupi, the 4,800-megawatt plant that will be the world’s fourth-largest using coal. Strikes that have halted output at the Arnot and Matla mines in Mpumalanga province started on March 5 and have yet to be resolved, Hoboyi said.

Management, workers and union representatives are in a meeting about the strike and unable to take calls, according to a person who answered a call at the mine manager’s office.

Exxaro’s projected total spending for Grootegeluk has increased by 700 million rand ($77 million) to 10.2 billion rand because of labor unrest, steel shortages, and additional scope that’s been added to project, the Pretoria, South Africa-based company said in a statement yesterday.

The company has started supplying Medupi with coal for stockpiles.

The shares rose for the first time in three days, adding 0.7 percent to 170.03 rand by 11:20 a.m. in Johannesburg.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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