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[Ferro-Alloys.com] Exxaro and Eskom sign a long-term Coal Supply Agreement for Matla Power Station, securing sustainable energy for the future

Exxaro Resources and Eskom Holdings SOC Ltd yesterday signed a new long-term Coal Supply Agreement (CSA) between Exxaro’s Matla Mine and Eskom, securing the continued supply of coal from Exxaro’s Matla Mine to the Matla Power Station and reinforcing a strategic partnership that has supported South Africa’s electricity generation for more than four decades.

Matla Mine first entered into a CSA with Eskom on 1 July 1983, with the agreement originally set for a period of 40 years. This new agreement between the two entities ensures continued coal supply for Eskom’s Matla Power Station, supporting the stability of South Africa’s energy system while maintaining operational continuity at the mine. The newly concluded agreement commenced on 1 April 2026 and is valid until 30 November 2043, with the term subject to extension or reduction by mutual agreement between the parties.

“The signing of this new Coal Supply Agreement marks an important milestone in our long-standing partnership with Eskom and reinforces our shared commitment to supporting South Africa’s energy security needs in line with national demands and fluctuating geopolitical influencers. This agreement comes on the back of Eskom’s recent investment in the Matla Life of Mine (MLOM) expansion project, which strengthens the mine’s ability to sustainably supply coal to the Matla Power Station for the remainder of its life. Exxaro is confident in the future of the operation and confirms the strategic importance of Matla as a key operation within our coal portfolio, representing our commitment to responsible resource development, and our continued focus on delivering reliable energy solutions that support the country’s economic growth, while creating lasting value for our employees, host communities and the broader economy,” said Ben Magara, Chief Executive Officer of Exxaro.

“Today’s signing of the long-term Coal Supply Agreement with Exxaro represents a significant step forward in strengthening South Africa’s energy security. This agreement ensures predictability and stability in the supply of coal to the Matla Power Station, an essential component of our generation fleet, and reinforces a partnership that has supported the nation’s power system for more than four decades,” said Eskom Group Chief Executive, Dan Marokane.

“Crucially, this new contract structure is a key deliverable of Eskom’s Cost Optimisation and Revenue Enhancement (CORE) programme, which aims to drive efficiencies in primary energy procurement. Through improved operational performance and streamlined supply?chain logistics, Eskom expects to realise meaningful long?term cost savings that directly support its financial recovery and operational sustainability. The framework also delivers lasting socio?economic benefits to the Mpumalanga region by safeguarding jobs and supporting economic activity in communities surrounding the Matla operations,” Marokane added.

As Eskom advances its recovery and sustainability efforts, the agreement underscores coal’s continued role in providing the baseload capacity required to stabilise the grid. Securing a reliable supply from Matla ensures that, as the grid is decongested to enable rapid renewables penetration, Eskom maintains the operational consistency and security of supply needed to support South Africa’s developmental and industrial needs.

The agreement positions both organisations to fulfil this role responsibly in the years ahead. Beyond electricity generation, Matla Mine remains a vital economic anchor in Mpumalanga, supporting employment, education initiatives, enterprise and supplier development, land?use management, and infrastructure projects in surrounding host communities.

The long-term agreement also provides the stability required to sustain ongoing investment in operational efficiency, safety standards, and environmental stewardship, ensuring that the mine continues to operate in a manner aligned with responsible mining practices. Furthermore, the agreement includes stringent coal quality specifications that ensure higher combustion efficiency at Matla Power Station; this consistency is vital for reducing the plant’s overall carbon footprint and supporting Eskom’s commitment to progressive emissions reduction.

As Exxaro celebrates its 20th anniversary characterised by impact beyond the surface, the organisation remains committed to working collaboratively with Eskom and other key stakeholders to support South Africa’s energy requirements, while continuing to advance its broader Sustainable Growth and Impact (SG&I) strategy of responsible resource management and sustainable value creation for all stakeholders as it strives to become a diversified natural resources champion in Africa and beyond.

About Exxaro

Exxaro Resources Limited is a South Africa-based diversified natural resources company and one of the largest black-empowered businesses listed on the Johannesburg Stock Exchange (JSE). Exxaro has operations in South Africa, with business interests extending to Europe and Australia. The company’s primary assets include coal, a growing energy solutions business, equity accounted investments in iron ore and base metals, predominantly zinc, with acquisitive growth ambitions in energy transition metals. Exxaro has recently finalised the acquisition of manganese assets in the Northern Cape, further bolstering its commitment to being a natural resources champion in South Africa and beyond.

About Eskom

Eskom Holdings SOC Limited (Eskom) is a state?owned corporation as defined in the Companies Act 71 of 2008 and is wholly owned by the Government of South Africa, with the Minister of Electricity and Energy acting as the shareholder representative. Eskom operates across the full electricity value chain, Generation, Transmission, and Distribution, through its operational divisions and wholly owned subsidiaries.

Eskom owns and operates the majority of South Africa’s base?load and peaking electricity generation capacity. The Group operates 30 power stations with a combined nominal installed capacity of 46,866MW, utilising a diversified range of energy sources, including coal, fuel oil, nuclear fuel, water, wind, and diesel. Eskom also manages an extensive transmission and distribution network exceeding 411,000 kilometres of power lines, the largest electricity network on the African continent.

With a dual commercial and socio?economic mandate, Eskom is committed to ensuring energy security, achieving financial sustainability, and enabling a just transition towards a lower?carbon future. Eskom supplies more than 86% of South Africa’s electricity demand and contributes approximately 20% of the electricity generated across the African continent.

• [Editor:tianyawei]