The joint venture is developing the ATC and ATCOM mines, capable of producing at least 2.5 million tonnes of coal each year.

Xstrata has the mining rights to both mines and until a dissolution agreement is reached, will continue to manage and operate the mines covered by the agreement, including meeting all of the business' existing sales contracts.

"TCSA has continuously failed to comply with certain essential terms of the JV agreement,” Peter Coates, chief executive of Xstrata Coal said, according to McCloskey Coal Report.

An interim settlement agreement was recently signed following an arbitration process initiated by Tavistock, which required TCSA to comply with the provisions of the JV agreement. Coates said TCSA failed to participate in good faith and in full compliance with either the JV or the interim agreement.

"TCSA’s conduct has constituted a deliberate and unequivocal intention to frustrate the business of the joint venture and to preclude it from being conducted in accordance with the JV agreement. In the process, TCSA set about destroying the mutual trust and confidence between the parties, making it impossible for the JV to ensure that the operations function successfully, producing and selling coal, thus generating much needed export revenues and securing jobs for over 1,000 employees and contractors,” Coates said.

Xstrata said it was committed to meeting existing sales contracts established by the Joint Venture.

Total’s other South African assets are the 2Mtpa Forzando mine and 1Mtpa Dorstfountain mine.