South African power utility Eskom Holdings SOC Ltd. confirmed Feb. 22 that the Optimum coal mine started business rescue proceedings Feb. 19.
Optimum coal mine supplies thermal coal to Eskom's Hendrina Power Station in Mpumalanga.
Eskom said Optimum failed to make contractual deliveries to the power station in January, leading it to impose a penalty, which exceeded the invoice amount from the Optimum coal mine.
The mine has been unable to make coal deliveries since workers downed tools Feb. 22, and the power utility is sourcing coal from other mines for Hendrina.
According to a recent Reuters report, hundreds of members of South Africa's National Union of Mineworkers, or NUM, started a strike Feb. 21 at the Optimum coal mine amid concerns over the operation's viability.
In 2016, Gupta family-owned Oakbay Investments Pty. Ltd.'s Tegeta Exploration & Resources Ltd. acquired the mine from Glencore Plc for 2.15 billion South African rand.
Several banks have cut all ties to the Gupta family due to reputational risk, though the family has repeatedly denied links to former South African President Jacob Zuma, whose presidency had been plagued by corruption, or to any other wrongdoing.
Separately, the NUM accused Optimum of not paying salaries to its members on time and said the workers would not return to work, Reuters reported Feb. 23, citing NUM spokesman Livhuwani Mammburu.
"The guys were not paid and they want a meeting with the CEO because they are concerned about the business rescue proceedings which they were not informed about," Mammburu was quoted as saying.
More than 500 workers are planning to strike at the Gupta-owned Koornfontein mine Feb. 26 over uncertainty around salary payments.
"We will down tools this coming Monday and we will not go back to work until our salaries are paid," NUM Koornfontein Branch Secretary Sbusiso Mahlangu said.