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Eskom signs coal supply deal for Majuba

Striking view of
Eskom’s Majuba
power station
Johannesburg, South Africa — MININGREVIEW.COM — 10 December 2009 – South Africa’s power utility Eskom has signed a 17-year coal supply deal for its Majuba power plant with a joint venture made up of niche, diversified South African mining company African Rainbow Minerals Limited (ARM) and Swiss-based, diversified mining group Xstrata Plc.

An Eskom statement released here said the joint venture’s Goedgevonden colliery would supply Majuba with 3.5 million tonnes of coal per year, starting this month.

“The signing marks the conclusion of three years of negotiations between the parties. It marks a shift for Xstrata, moving from being predominantly an exporter of coal to supplying a major player in the domestic market,” the Eskom statement added.

ARM Coal owns a 51% stake in the Goedgevonden colliery, with the remaining 49% belonging to Xstrata Coal South Africa.

Meanwhile South African diversified miner Exxaro revealed that Eskom had notified the company “’ the utility’s main coal supplier “’ that it would seek to review the commercial terms in a coal supply deal for Eskom’s new Medupi plant.

The miner said it would suspend its funding programme and placement of additional contracts for the brownfield expansion at its Grootgeluk mine, pending the outcome of the review.
Caption, Pic 1: Striking view of Eskom’s Majuba power station.