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Limpopo coal mine decarbonising through cost-cutting solar power agreement

Exxaro CEO Dr Nombasa Tsengwa.

Grootegeluk operation.

Grootegeluk in Limpopo.

5th July 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Financial close has been achieved for the 68 MW Lephalale solar project to supply renewable energy to the Grootegeluk coal mine in Limpopo.

This was announced on Wednesday by Cennergi, the wholly owned subsidiary of Exxaro Resources, Grotegeluk’s owner and operator. Cennergi will supply renewable energy to the flagship mine for 25 years through a power purchase agreement.

The project will result in energy cost savings, increased energy security and decarbonisation benefits for Exxaro, as well as fostering sustainable development and enhancing the socioeconomic benefits for local communities.

Leveraging solar power to meet Grootegeluk’s energy needs is a follow-through of the commitment of the Johannesburg Stock Exchange-listed Exxaro to pursue business sustainability and support the green energy transition.

Funding will take the form of limited recourse project finance debt from lenders, as well as equity investment from Cennergi as sole shareholder.

An engineering, procurement and construction contract will be awarded for the 19-month construction of the project, for which an operations and maintenance contract will also be awarded.

“This project represents a significant milestone in South Africa's renewable energy landscape and showcases the enormous potential of clean energy in driving economic growth and reducing carbon emissions,” Exxaro CEO Dr Nombasa Tsengwa stated in a media release to Mining Weekly.

The Lephalale solar project, which will serve as a direct behind-the-meter clean energy source, spans 236 ha of Exxaro land, near Eskom's Matimba coal-fired power station, to which Exxaro supplies coal on contract, as well as the town of Marapong.

A thrilled Exxaro Resources MD energy Leon Groenewald described the solar project as a landmark renewable energy partnership.

Edited by Creamer Media Reporter

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