Pretoria - Eskom and BHP Billiton have signed an amended power supply agreement for a smelter in Mozambique.
The Mozal aluminium smelter in Mozambique agreement which was effective as of 31 March was signed on Sunday.
"The agreement, effective 31 March 2010, removes the impact of embedded derivatives on Eskom's balance sheet, as well as all onerous conditions. This amended agreement is also an important step in ensuring that both Eskom and BHP Billiton continue advancing the growth and development of southern Africa," said the parastatal's acting Chairman Mpho Makwana.
When coming to contracts for the supply of electricity to South Africa's Hillside and Bayside smelters in Richards Bay discussions are underway for the coming months. The intention is to conclude binding agreements before the end of Eskom's 2010/11 financial year.
While discussions are ongoing BHP Billiton contracts will remain binding.
BHP Billiton remains acutely conscious of the electricity supply challenges facing South Africa and the region and has been exploring innovative and sustainable solutions to these challenges.
"With the announcement of the amended Mozal agreement, Eskom and BHP Billiton remain confident that, given the necessary time and commitment, innovative and mutually beneficial solutions will be found for the South African smelters," said BHP Chairman Xolani Mkhwanazi.
The smelters, Mkhwanazi said, will continue to make an important contribution to the South African economy as well as fulfill a commitment to a 10 percent power reduction.
The new pricing agreement will be submitted to the National Energy Regulator of South Africa for approval.
