Arrest of Eskom truck driver hints at criminal grip over SA’s coal value chain

THE arrest of a coal truck driver highlights the extent of problems Eskom faces as it seeks to stem corruption it says is costing the country billions of rands.

The Government-owned utility detailed how security services arrested a contracted employee who attempted to deliver inferior coal to its Camden power station. Coal that is delivered to Eskom has to meet with specific size, moisture and energy specifications in order it burns at the correct efficiency.

According to Eskom, the driver was employed at a coal transport company contracted by Eskom. He left the Msimbithi coal mine in Wonderfontein, Mpumalanga province with correctly sized coal which he then swapped for an inferior quality coal at an illegal coal yard. The good coal was to be traded for profit at a later stage.

Normally, mining companies seal outbound laden trucks but in this particular case this protocol was not followed. Instead, the driver left with seals in order he could later seal the inferior coal.

As the coal would have to be tested for the correct specifications at point of origin and destination, the conclusion is that the truck driver has accomplices at the mine and at the power station. Eskom said that the “processes are deliberately bypassed by some criminal elements in the mines, transporters and Eskom alike”.

It added that the investigator at Bidvest Protea Coin, its contracted security firm, was bribed to the tune of R50,000 not to conduct the arrest. It underlines the breadth and well funded nature of the corruption.

Two other truck drivers were arrested at the same power station while in possession of stolen coal two weeks ago, said Eskom. “The arrest of these unscrupulous individuals is a significant step in our fight against crime in Eskom,” said Advocate Karen Pillay, General Manager for Security at Eskom. 

“Coal theft is highly organised criminal activity and syndicates involved are being enriched through the proceeds derived from the trade in stolen coal,” said Eskom.

“Eskom continues to lose billions of rands due to the misappropriation of coal and similar commodities which directly affects production. There are several illicit coal stock yards and dump sites in the province who are recipients of the stolen coal,” it said.

Under the leadership of former CEO Brian Molefe, Eskom began contracting coal from distantly placed, smaller mines in the place of long-term contracted coal. Molefe argued at the time it was to promote empowerment and to encourage the coal spot market which he said would lead to better primary energy pricing.

In effect, the move paved the way for the so-called ‘transport mafia’ which dealt in inferior coal delivered at exorbitant prices to Eskom’s power stations.

In July, public enterprises minister Pravin Gordhan said the country had identified a “coal mafia” operating in Mpumalanga province which was partly behind the poor performance of Eskom’s power stations.

These coal providers were responsible for supplying coal to Eskom contaminated with metal and rubble that has damaged its equipment. “You’ll begin to see more and more visibly push back in this particular regard from the various authorities,” said Gordhan.