Exxaro Resources and Eskom Holdings have signed a new long-term coal supply agreement (CSA) based on their partnership, which began on July 1, 1983. This agreement guarantees that coal will continue to be delivered from Exxaro’s Matla Mine to the Matla Power Station in Mpumalanga.
The new agreement went into effect on April 1, 2026, and will last until November 30, 2043. The parties can agree to extend or shorten the term of the agreement.
Helping South Africa meet its energy needs
“This new coal supply agreement is a big step forward in our long-term partnership with Eskom. It shows that we are both committed to meeting South Africa’s energy security needs in line with national needs and changing geopolitical factors.”
Ben Magara, CEO of Exxaro, said, “This agreement comes after Eskom recently put money into the Matla Life of Mine (MLoM) expansion project, which makes it easier for the mine to keep supplying coal to the Matla Power Station for the rest of its life.”
Dan Marokane, the group CEO of Eskom, said that the new CSA is a big step forward in making South Africa’s energy security stronger.
Marokane said, “This agreement makes sure that the supply of coal to the Matla Power Station, which is an important part of our generation fleet, is stable and predictable. It also strengthens a partnership that has helped the country’s power system for more than 40 years.”
“This new contract structure is very important because it is a key deliverable of Eskom’s Cost Optimisation and Revenue Enhancement (CORE) program, which aims to make the process of buying primary energy more efficient.
Eskom hopes to save a lot of money in the long term by improving the performance of its operations and making its supply chain more efficient. These savings will help the company recover financially and keep its operations going.
Marokane went on to say, “The framework also brings long-term social and economic benefits to the Mpumalanga region by protecting jobs and encouraging economic activity in communities near the Matla operations.”
The agreement makes it clear that coal will still be needed to provide the baseload capacity needed to keep the grid stable.
Getting a steady supply from Matla means that Eskom can keep the grid running smoothly and securely while it is being cleared to make room for more renewable energy sources. This is important for meeting South Africa’s industrial and developmental needs.
The deal puts both groups in a good position to do this job well in the future.
Matla Mine is still an important economic anchor in Mpumalanga, supporting jobs, education programs, business and supplier development, land use management, and infrastructure projects in nearby host communities, in addition to generating electricity.
The deal also includes strict rules about the quality of the coal that will be used at Matla Power Station, which will make it burn more efficiently.
