An alleged dispute between Eskom and the mining company Vunene Mining, who is currently mining at the Usutu Mine outside of Ermelo on the Piet Retief road, can be questioned as negotiations between the two parties are already underway.   According to an article, which was written by Barry Sergeant from Moneyweb, Eskom has been negotiating with the Department of Mineral Resources (DMR) for six years for the return of Usutu Mine, situated on the front door of Camden Power Station.  Apparently Eskom bought Usutu’s mining rights and land from its former owner, Trans-Natal in the early 1990's, after Camden was mothballed in 1991.  The original plan was to move coal from Usutu to Camden by conveyer belts, but instead Camden is currently having to truck in coal from elsewhere, whereas the coal from Usutu is allegedly being exported.  In the process the roads are being ruined and Eskom is expected to foot the bill.  The community of Ermelo has been complaining about the environmental issues and damages caused to the town for some time now, and Eskom has been the only party coming to the negotiation table.   The Highveld Tribune took the issue up with the Senior Management of Vunene Mining, who has been mining at Usutu for the past 18 months.  “Vunene Mining (PTY) Ltd (Vunene) is not involved in any dispute with Eskom or any other party over the mining rights of the old Usutu complex.  Vunene applied for a prospecting right over the area of interest in terms of the Mining and Petroleum Resources Development Act (MPRDA) and was awarded the rights in September 2006.  Vunene conducted prospecting work in terms of the prospecting rights and eventually applied for the mining rights in terms of the MPRDA which was granted during October 2009.Vunene has never through this entire process been informed by either Eskom or the DMR that the rights which have been issued to Vunene are under dispute, internal appeal or review.  Vunene has in fact been in regular consultation and negotiation with Eskom on the issue of rehabilitation costs associated with Eskom’s historical mining activities on the area of interest as well as the supply of coal to the Eskom Camden Power Station (Camden).   It is common cause in terms of the MPRDA that historical rehabilitation activities and its associated costs are the responsibility of the historical owner of the rights. (In this instance Eskom).  To give effect to Eskom’s rehabilitation responsibilities and to determine the costs thereof, Vunene was appointed by Eskom in November 2008 in terms of an Eskom Care and Maintenance Agreement.  Vunene has since conducted all of the activities in terms of this agreement and has to date met all of its obligations in terms of this agreement without having any disputes with Eskom.  This Care & Maintenance Agreement is still in effect between the two parties.   In its application for a mining right Vunene did consider Eskom as a key customer.  To ensure that it secured Eskom as a key customer Vunene started engaging in negotiations to sell the coal to Eskom during the prospecting phase.  As a result Vunene and Eskom concluded a supply agreement in February 2008 in terms of which Vunene was to commence with the first supply of coal to the Camden Power Station on 1 August 2008.  This agreement was, however, subject to a suspensive condition that Vunene obtains a mining right to enable it to commence mining before 1 August 2008.  As a result of the fact that Vunene could not obtain a mining right in time to meet the commencement date, this agreement was cancelled by Eskom during August 2009. Shortly after the cancellation of the first agreement, Vunene and Eskom re-engaged in the coal supply negotiations and these negotiations were effectively concluded during October 2010 when an agreement in principle was reached between the parties for Vunene to supply coal to the Camden Power Station for the next 5 years.  The final signature and implementation of this agreement is subject to final testing of the Vunene Usutu coal in the newly refurbished Camden Power Station.  Vunene has started delivering coal during November 2010 to the Camden Power Station in order for the tests to be performed. It is expected that the test work will be completed by end March 2011 after which Vunene will hopefully commence to supply Camden on a regular monthly basis.  It is important to note that it is not a condition in terms of our mining right that we must supply coal to Camden, but we reiterate that it is our intention to supply coal to Camden on a long term basis as soon as the contract is concluded at the end of March 2011.   In the absence of a formal supply agreement with Eskom, Vunene has been supplying all of its monthly coal production to local customers.  The Usutu mine does not have any coal washing facilities, nor does it have access to a railway siding or any export allocation and therefore it has not exported any coal.  It is, however, possible that some of Vunene’s local customers may have exported some of the coal supplied to them by Vunene.     Vunene is aware of the transaction which took place between Eskom and Trans-Natal in the early 90’s and Vunene has to date engaged, negotiated and agreed on all relevant issues with all the parties concerned to ensure that it has legal access to all surface rights and other infrastructure pertaining to its area of interest.  Vunene owns all the surface rights on the areas that are currently being mined and it has also provided for the funding of the rehabilitation of these areas as per the requirements of the MPRDA.  Vunene has the intention to purchase all other areas of interest or will alternatively compensate the surface owners as required for in terms of the MPRDA,” the management of Vunene concluded.