JSE-listed coal miner Wescoal reports that Arnot Opco, in which it holds a 50% stake, has entered into a long-term coal supply agreement (CSA) with State-owned power utility Eskom to supply coal from the Arnot mine, in Middelburg, Mpumalanga, for the next ten years.
The CSA marks the conclusion of months of negotiations with the power utility, which commenced mid-2020 following the Arnot Opco incorporation.
The initial transaction between Arnot Opco and Exxaro Coal Mpumalanga (ECM) in 2019 was heralded as “one-of-its-kind” by the South African regulatory authorities and was led by retrenched ECM Arnot mine employees, Innovators Resources in partnership with Wescoal.
Through the CSA, Arnot Opco will deliver coal to Eskom’s Arnot power station through conveyor belts, thereby reducing costs for both the power utility and the mining company.
The first delivery to Eskom is expected this year.