Continental Coal has announced that Ntshovelo Mining Resources, the joint venture entity that operates the Vlakvarkfontein coal mine in South Africa, has executed a coal supply agreement with the state utility company, Eskom.
The agreement is for the supply of 720,000 tonnes per annum of thermal coal of quality suitable for some of Eskom's power stations over an initial three-year period which commenced on 1 March.
Eskom is one of the top 20 utilities in the world by power generation capacity, generating approximately 95 per cent of the electricity used in South Africa and approximately 45 per cent of the electricity used in Africa.
As a result of the agreement, the Vlakvarkfontein coal mine has now become one of only 25 direct suppliers of coal to Eskom in South Africa.
Commenting on the deal, Kiren Maharaj, Eskom’s general manager of Fuel Sourcing, said: "We welcome Ntshovelo as a new direct supplier to Eskom and look forward to building a strong strategic partnership with Ntshovelo. Both the teams from Eskom and Ntshovelo worked well together to bring about this day of signing. Eskom's need from suppliers like yourselves will grow significantly in the next 10 year planning horizon, with a good deal of the coal being conveyed by rail to Eskom's power stations."
Continental's chief executive officer Don Turvey said: "We congratulate both the Eskom and Ntshovelo teams for having reached this milestone, and look forward to forging a harmonious supply relationship with Eskom. We are ready to implement the agreement."
Owner Siweya, Mbuyelo Resources’ chief executive, added: "This is a great achievement. We are pleased to be entering into this long term supply relationship with Eskom, and thank the teams from both parties on their efforts."
Continental Coal is a coal mining investment and production company with offices in South Africa, Australia and London.
