Eskom signs 10-year coal supply deal with Arnot Opco

Eskom has announced that it has signed a coal supply deal with Arnot Opco (Pty) for one of its power stations.

“In terms of the agreement, Arnot OpCo will supply the full coal requirement for the life of Arnot Power Station,” the power utility said in a statement.

“The coal is of high quality, and if the need arises, it may be used at other stations.”

The utility said that the contract has an exit clause, but it is only after six years that the agreement may allow both parties to cancel the contract.

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“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,” reads the statement.

“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.

Eskom’s general manager for Primary Energy Sandile Siyaya said that the deal will help create employment and ensure affordable coal suply for the station.

“The transaction demonstrates that a mining asset curtailed by a major miner can be operated viably
in the hands of a junior miner,” said Siyaya.