Australian and South African listed Firestone Energy detailed a proposed off-take agreement with utility Eskom on Tuesday. Firestone confirmed a shareholder agreement with government-owned financier, the Industrial Development Corporation had been agreed.

The company, which owns the 58 million tonne semi soft Waterberg coking coal project in South Africa's Limpopo province, would supply 525kt a year of coal to Eskom’s Matimba power station for three years from April 2012. Supply would ratchet up to 1 million tonne per year for a further three years thereafter. Marketing finalisation of coking coal from the Waterberg project is dependent upon the conclusion of regulatory filings with the South African government.

Firestone anticipated this process will be completed in June about three months later than originally envisaged. The coking coal will be exported and used domestically.

The IDC is set to pump ZAR 250 million (USD 37.9 million) into Firestone’s Waterberg project in return for 33% of the company’s joint venture partner Sesoko Coal’s shares.

(Sourced from coalportal.com)