Exxaro Resources has signed a new 17-year agreement, running from 2026 to 2043, to supply coal from the Matla mine to Eskom, South Africa’s key electricity producer.
Under the Coal Supply Agreement (CSA), coal will continue to be transported directly from the mine to Eskom’s power station, a structure that links the mine’s output exclusively to the station.
Exxaro Chief Executive, Ben Magara, said the deal represents a milestone in the companies’ partnership and reinforces their commitment to South Africa’s energy security.
“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,” Magara said.
The agreement follows Eskom’s investment in the Matla Life of Mine expansion project, which is designed to sustain coal production through the power station’s remaining operational lifespan.
Magara added that the new CSA reinforces the strategic importance of the Matla operation within Exxaro’s broader portfolio.
Eskom ties deal to cost recovery plan
Eskom says the agreement forms part of its Cost Optimisation and Revenue Enhancement (CORE) programme, which targets greater efficiency in fuel procurement and operational stability.
The Group Chief Executive of Eskom, Dan Marokane, said the contract introduces predictability into coal supply arrangements, which he described as critical for generation planning.
“This agreement ensures predictability and stability in the supply of coal to the Matla Power Station, an essential component of our generation fleet.
“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,” he said.
The utility expects the deal to deliver long-term cost savings through improved supply-chain coordination and operational performance, which the utility says will support its financial recovery.
Coal remains central as grid pressures persist
South Africa continues to depend heavily on coal-fired generation to meet its electricity demand, with Eskom operating the majority of the country’s power stations and coal accounting for a significant share of installed capacity.
According to Eskom, plants such as Matla Power Station provide baseload electricity.
The country has faced persistent electricity shortages in recent years, driven by aging infrastructure, mounting maintenance backlogs, and operational difficulties across Eskom’s generation fleet.
Against this backdrop, the utility has pursued long-term coal supply agreements for its operating coal-fired stations as a means of securing fuel certainty and reducing procurement risk across its generation portfolio.
Eskom says the agreement extends one of South Africa’s longest-standing coal supply partnerships between a mining company and the national power utility.
