State-owned power utility Eskom and diversified resources group Exxaro Resources have final- ised the coal supply agreement for Eskom’s new baseload power station, the Medupi power station, situated in Lephalale, Limpopo.
Exxaro’s capital expenditure for the project is estimated at R9-billion and production is planned to begin in the third quarter of 2011 with ramp-up to full production by 2014. Exxaro’s Grootegeluk mine, will, over the next 40 years, supply an average of 14,6-million tons of power station-grade coal to Medupi every year.
The coal to Medupi will be supplied through a brownfield expansion of the Grootegeluk mine, with mining from the existing opencast pit continuing at an accelerated rate.
The coal beneficiation process will be handled by two new dense-media facilities,the Groote- geluk 7 and the Grootegeluk 8 beneficiation plants, which will be constructed at the mine.
Eskom CEO Jacob Maroga says, “The investments by both Eskom and Exxaro will have a significant benefit to the local, provincial and, ultimately, the South African economy.
Direct jobs created during construction through both investments will peak at about 9 500 with the Eskom investment generating 8 000 jobs and the Exxaro investment generating 1 500 of these jobs. Further, thousands of indirect jobs will also be created during the construction of the power station and the expansion of the mine.”
Exxaro CEO Sipho Nkosi says that Exxaro values the cooperative and long-standing relationship that has developed between Eskom and Exxaro and is pleased to be able to continue this mutually beneficial relationship.
Nkosi adds that Exxaro estimates that 550 permanent jobs will be created at the Groote- geluk mine.
The technical and commercial teams have negotiated an agreement that has been ratified and approved by the boards of both Eskom and Exxaro.
Medupi is the first of Eskom’s new-generation baseload coal-fired power stations and it will comprise six 800-MW generation units capable of supplying 4 800 MW of generation capa-city to the national grid. Medupi will be the largest air-cooled power station in South Africa and its first-generation unit is scheduled for commercial operation during the last quarter of 2011, with the last unit expected to be in operation in the first half of 2014.