Eskom have signed a Memorandum of Understanding (MoU) with Anglo American Inyosi Coal of South Africa.

The MoU was signed on 21 November 2014 and relates to the development of the New Largo project for the supply of coal to the Kusile power station currently under construction near eMalahleni in the Mpumalanga Province.

Technical details still to be concluded

The MoU paves the way for the two companies to negotiate and conclude the commercial and technical aspects of the project.

The Department of Public Enterprises stated that approval was subject to the conditions of the Public Finance Management Act, and Eskom and Anglo American will further engage on the strategic and empowerment imperatives required in the Act.

The Chief Executive of Eskom:

Mr Tshediso Matona said, “The MoU is about how we cooperate to progress the economy and the country to a bright future. Eskom and Anglo American are key pillars of the South African economy and we therefore cannot fail the country.”

The Chairman of Anglo American Inyosi Coal:

Mr Themba Mkhwanazi said,

“This MoU is a culmination of months of negotiations and enables the continued implementation of the New Largo project. The purpose of this MoU is to affirm that, while both Anglo American Inyosi Coal and Eskom are broadly aligned regarding Eskom’s empowerment imperatives, we need to establish a framework within which we can co-operate and achieve a mutually beneficial outcome.”

Eskom generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa, generating, transmitting and distributing electricity to industrial, mining, commercial, agricultural and residential customers.

Eskom’s installed capacity is 42GW (gigawatts), 85% generated from coal.  Other generation technologies include hydro, nuclear, pumped storage and gas.

Eskom has approved and committed to:

  • Building the Medupi and Kusile coal-fired power stations, two new gas-turbine plants, and the Ingula pumped storage plant
  • Recommissioning three coal-fired plants that were previously mothballed
  • Upgrading other existing plants
  • Building new infrastructure, including new transmission lines and two renewable energy plants.

The completion of the Kusile power station in 2017/18 will constitute the last stage of Eskom’s committed capacity expansion programme. There has been no approval or commitment to any capacity expansion projects after that.