Eskom signs coal supply agreement

Wednesday, December 9, 2009

Pretoria - Eskom has signed a 17-year agreement with ARM Coal and Xstrata to supply coal to the Majuba Power Station.

In terms of the agreement, the Goedgevonden Colliery will start supplying the 60 million tonnes of coal, or approximately 3.5 million tonnes per annum, this month through to 2026.

The signing marks the conclusion of three years of negotiations between the parties.

"Signing this coal supply agreement with ARM Coal and Xstrata heralds a partnership which marks a significant milestone in ensuring security of supply to our nation," said Brian Dames, Eskom's Chief Executive Officer: Generation Business.

The agreement has further significance as it marks a shift for Xstrata, moving from being predominantly an exporter of coal to supplying a major player in the domestic market.