In the second off take agreement Resource Generation has signed in the second half of this year, the Indian steal company Bhushan Steel will purchase coal for 20 years from the Resource Boikarabelo mine in South Africa.

Under the terms of the contract, Bhushan will purchase 500,000 tonnes of thermal coal annually for the first five years of production, followed by a minimum of 500,000 tonnes each year for another 15 years.

The price will be at international market prices at the time of each shipment.

Mr Paul Jury MD of Resource Generation said “This is the second long term export contract demonstrating confidence in the quality of the Boikarabelo mine as well as its potential into the expanding Indian market.”

In September, Resource entered into an off take agreement with Integrated Coal Mining, with the Boikarabelo mine to supply 1 million tonnes of thermal coal annually for the first three years, followed by 2 million tonnes each year for another 17 years.

Resource Generation Limited is developing one of South Africa’s largest remaining coal deposits. The Boikarabelo tenements, in the Waterberg region of South Africa have probable saleable reserves of 603 million tonnes, an indicated resource of 570 million tonnes and an inferred resource of 1.7 billion tonnes, which are expected to increase following further drilling. Production is forecast to commence in January 2013.

(Sourced from proactiveinvestors.com.au)