The contract has an exit clause after six years that may allow both parties to cancel the contract.
The agreement serves to secure coal supply and to meet the burn requirements of the power station by conveyor belt, replacing the current supply by road from various sources on short- to medium-term contracts, some of which were signed under emergency and urgent procurement. This transaction paves way for Eskom to reduce the costs of operating the Arnot Power Station while securing high quality coal at affordable prices.
"While securing affordable coal supply for the Arnot Power Station, this transaction will help create employment opportunities for the retrenched Arnot Mine workers and entrepreneurship opportunities for the Middleburg community," said Sandile Siyaya, Eskom’s General Manager for Primary Energy. He said the transaction demonstrates that a mining asset curtailed by a major miner can be operated viably in the hands of a junior miner.
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