Seriti Resources coal deal with Eskom’s Kusile still 18 months away

SERITI Resources was in discussions with Eskom to supply it with two million tons of coal from its New Largo project in Mpumalanga province by the end of the year, but a coal sales agreement (CSA) between the parties could be delayed, said Bloomberg News.

Citing comments by Eskom before parliament’s Standing Committee on Public Accounts, Bloomberg News said that a CSA between Eskom and Seriti is about 18 months away. This was after Seriti Resources had requested more time to study New Largo’s mine plan and development schedule, it said.

New Largo was sold to Seriti Resources by Anglo American for about R850m in 2018, a year after the UK-listed group sold the 24 million tons a year Eskom-dedicated mines of New Vaal, New Denmark and Kriel to Seriti.

However, the development of New Largo has been held up and could become overdue by some 13 years including the time Anglo American owned the mine and did not develop it, said Bloomberg News.

“We recognise that the development of the main mine is lagging the development of the adjacent Kusile power station and so expediting these contractual discussions is both important and urgent,” Mike Teke, CEO of Seriti Resources, told Bloomberg News in an e-mailed response to questions. “We intend to start negotiations with Eskom as soon as possible for the supply of coal from the main mine.”

In the meantime, Eskom and Seriti have been negotiating the mining of mini-pit areas of New Largo, which could result in two million tons of annual production by the end of the year. The utility is also talking to third-party suppliers, said Bloomberg News.

“There will be no delay of coal supply to Kusile Power Station,” Eskom said.

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