20100914
reuters

JOHANNESBURG (Reuters) - South Africa's Optimum Coal Holdings Ltd said on Tuesday it would continue to deliver coal to power utility Eskom pending the outcome next year of arbitration over a contract dispute.

Optimum Coal Proprietary Limited reached an agreement in 2008 to supply Eskom's Hendrina power station with 5.5 million tonnes of coal a year. It issued a notice to cancel the deal in May, saying Eskom was in breach of the contract and owed it 22 million rand. Eskom disputed the claims.

"(Optimum) and Eskom have agreed that, pending finalisation of the arbitration, the company will continue to deliver coal to Eskom in terms of the (agreement), as if that agreement had not been cancelled," Optimum said in a statement.

The arbitration has been postponed until March-April 2011, the company added.

Optimum, South Africa's sixth-largest producer of thermal coal, said it would stop supplying coal to Hendrina and recover the amount owed if it succeeds in the arbitration, and would continue delivering the coal if it is unsuccessful.