Eskom signs coal supply agreement with employee-owned Arnot mine for supply of coal to Arnot Power Station
12 August 2021
Eskom is pleased to announce that it has entered into an agreement with Arnot OpCo (Pty) Ltd for the supply of coal for the Arnot Power Station. In terms of the agreement, Arnot OpCo will supply the full coal requirement for the life of Arnot Power Station. The coal qualities is coal of high quality, and if the need arises, it may be used at other stations. The coal qualities are for coal of high quality, and if the need arises, it may be used at other stations. The contract has an exit clause after Year 6 that may allow both parties to cancel the contract.
The agreement serves to secure coal supply and to meet the burn requirements of the power station by conveyor belt, replacing the current supply by road from various sources on short- to medium-term contracts, some of which were signed under emergency and urgent procurement. This transaction paves way for Eskom to reduce the costs of operating the Arnot Power Station while securing high quality coal at affordable prices.
“While securing affordable coal supply for the Arnot Power Station, this transaction will help create employment opportunities for the retrenched Arnot Mine workers and entrepreneurship opportunities for the Middleburg community,” said Sandile Siyaya, Eskom’s General Manager for Primary Energy. “The transaction demonstrates that a mining asset curtailed by a major miner can be operated viably in the hands of a junior miner.”
Arnot OpCo is half-owned by 1 038 former Exxaro Resources employees who were retrenched in 2015 from the Arnot Mine in Middelburg, Mpumalanga. JSE-listed Wescoal Holdings owns the other half of Arnot OpCo.