December 02, 2008

Eskom and Exxaro to ink 2nd coal supply agreement

SA media reported that South African power utility Eskom could conclude the second half of the Medupi power station's coal contract with coal major Exxaro Resources in the third quarter of this year. The report cites Mr Rob Lines GM in Eskom's generation division as saying that this would bring total annual supply to as much as 17 million tonnes.

Mr Trevor Arran spokesperson for Exxaro's said the group remained in talks with Eskom regarding the supply of coal for the second phase of the Medupi station. He said "We have no definitive time for the conclusion of the second contract. But we would not disagree with that.” Mr Arran said the official contract was for 7.3 million tons a year for the first phase of the power station, but this could increase to 8.5 million tons a year for a total supply of 17 million tons.

In late March 2007, Eskmos and Exxaro concluded an agreement on the supply of coal for the first phase of the Medupi power station. Exxaro will supply Medupi station with 7.3 million tons of coal from its Grootegeluk mine in Limpopo's Waterberg area. Concluding the second contract at Medupi would help Exxaro achieve its goal of growing its annual coal output to 63 million tons by 2014 from 43 million tons last year.