Arnot Opco signs 10 year coal deal with Eskom to be delivered … by conveyor

ARNOT OPCO, a South African coal producer in which employees have a 50% stake, has concluded a 10-year supply agreement with Eskom, the government-owned power utility.

The company said in a statement today the coal sales agreement was the fruit of “many months” of negotiation. Arnot was formerly owned by Exxaro Resources. The mine was resuscitated by Wescoal Holdings, another South African coal producer, which owns the balance of the operation.

As part of the agreement, Arnot OpCo will deliver coal to Eskom’s Arnot power station through conveyor belts. This method of delivery will minimise costs for both the power utility and the mining company, it said.

“Before Arnot mine was shut down, it had been the primary source of income for many in this area,” said┬áBontle Aphane, Arnot Opco’s CEO. “With this significant CSA signing, we plan to hire more people from the community, as well as ex-employees – improving their economic prospects again and increasing our staff complement,” she said.

Conveyed coal is recognised as the cheapest way Eskom can take delivery of coal for its power stations.

Eskom primary energy GM, Sandile Siyaya delivered a bombshell in July when he told delegates at the Joburg Indaba’s Coal Day conference that significant amounts of coal had been stolen from the organisation en route to its power stations.

Siyaya was not able to provide specifics on the amount of coal being stolen or how it was being done, but indicated the problem centred on the weighbridges which trucks delivering coal to the power stations had to pass through.