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Exxaro agrees major coal offtake deal
Allan Seccombe
Posted: Thu, 29 Mar 2007
[miningmx.com] -- EXXARO Resources will supply state power utility Eskom's new power station with 7.3 million tonnes of coal over the next 40 years.
Exxaro, which was formed last year by hiving off the non-iron ore assets of Kumba Resources, will also supply coal to the expanded Medupi power plant near its Grootegeluk coal mine in northern South Africa.
The 7.3 million tonnes will feed the yet-to-be-constructed three units of the base load power station and negotiations are underway for contracts to supply coal to a second set of three units at Medupi, which will produce 4,500 megawatts of electricity.
"The importance of a long term supply of the right quality coal at the right price can never be over-emphasised given its direct impact on the viability of the new power station," said Eskom CEO Thulani Gcabashe.
The offtake agreement of generally lower grade
thermal coal from the Grootegeluk mine in the Waterberg area known as Lephalale means that the amount of higher grade coal Exxaro can export from the mine will increase.
"This agreement will further strengthen Exxaro’s position as the largest supplier to Eskom and will result in the mining and beneficiation complex at Lephalale being the biggest in the world," said Exxaro CEO Con Fauconnier.
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