* Glencore pushes back merger completion date
* Eskom has agreed on a framework for coal supply talks
JOHANNESBURG Jan 18 South African power utility
Eskom has withdrawn its objections to commodities trader
Glencore's takeover of miner Xstrata, removing
one of the potential hurdles to the $33 billion deal.
Earlier on Friday, Glencore pushed back the date for
completion of the long-awaited tie-up to March 15, citing
lengthy regulatory processes in South Africa and
Eskom, which was concerned the deal could affect its coal
supplies, said it dropped the objections after agreeing a
framework for discussion with Glencore on the issue.
The utility relies on coal-fired plants to generate 85
percent of the electricity that powers Africa's biggest economy
and has been keen to ensure the merger does not hamper its
ability to obtain timely, sufficient and competitively priced
Xstrata is one of South Africa's biggest coal producers and
a key supplier of the fuel to Eskom. The merged company will be
supplying 15 percent of Eskom's coal and will also be among the
largest traders in the coal market, the utility has said.
Eskom initially asked South Africa's competition regulator
to impose conditions on the Glencore-Xstrata tie-up to ensure
its coal supplies were not at risk.
"In consequence of the agreement reached between the
parties, Eskom has agreed to withdraw its intervention in the
merger proceedings," the utility said on Friday.
Eskom wants to ensure that the merged company does not
dominate the market by setting prices that it cannot afford or
opt for exports hoping for higher returns.
Insufficient and poor qualities of coal have been a concern
to Eskom in the past and affected its ability to meet fast-
rising demand for electricity.
Glencore is still waiting for the go-ahead for the deal from
antitrust authorities in South Africa and China, having already
received a conditional approval from European regulators.
Regulatory hearings in South Africa were scheduled to last
until Jan. 28. The National Union of Metal Workers of South
Africa (NUMSA) will present its arguments, while the Competition
Commission has made recommendations regarding job losses.