EXX - EXXARO RESOURCES LIMITED - Exxaro and Eskom agree on coal contract Release Date: 29/03/2007 17:00:25 Code(s): EXX
EXX - EXXARO RESOURCES LIMITED - Exxaro and Eskom agree on coal contract
for new power station
EXXARO RESOURCES LIMITED
(formerly Kumba Resources Limited)
Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
Share Code: EXX
ISIN Number: ZAE000084992
("Exxaro" or "the company")
EXXARO AND ESKOM AGREE ON COAL CONTRACT FOR NEW POWER STATION
Diversified resources group Exxaro Resources Limited (Exxaro) and state-
owned power utility Eskom today announced that they have reached an
agreement on the price and terms of the coal supply agreement for Eskom`s
new power station in Lephalale, Limpopo Province.
Exxaro`s Grootegeluk mine will, over the next 40 years, supply 7,3Mt of
power station coal a year to the first three units of the new base-load
power station, called Medupi. Delivery to the first unit will be in line
with Eskom`s construction programme for Medupi.
In December 2006 Eskom`s board also approved the development of a further
three units at the same site. This will increase the capacity at Medupi,
South Africa`s first new power station in over a decade, to 4 500 MW.
Exxaro and Eskom are in the process of negotiating a power station coal
supply contract for the additional three units.
"The importance of a long term supply of the right quality coal at the
right price can never be over-emphasised given its direct impact on the
viability of the new power station. We are confident that this agreement
serves both parties` best interests. We are looking forward to a continued
excellent relationship throughout the 40 and possibly even 50 years of the
expected life of Medupi power station," said Thulani S. Gcabashe, Eskom`s
"We value the co-operative relationship that has developed between Eskom
and Exxaro (previously Kumba and Eyesizwe) over the years and are pleased
to be able to continue this mutually beneficial relationship," said Dr Con
Fauconnier, Exxaro`s chief executive officer.
"This agreement will further strengthen Exxaro`s position as the largest
supplier to Eskom and will result in the mining and beneficiation complex
at Lephalale being the biggest in the world. The development of the new
power station and the extension to Grootegeluk will create jobs and add
significantly to the economic development of the town of Lephalale and the
region," added Dr Fauconnier.
Exxaro is the largest South African-based diversified resources group, with
interests in the mineral sands, coal, base metals, industrial minerals and
iron ore commodities. Exxaro was formed through the revised-listing on the
JSE Limited of Kumba Resources in November 2006 as part of a major black
economic empowerment transaction in which Kumba`s iron ore assets were
unbundled and listed as Kumba Iron Ore, and the non-iron ore assets were
merged with the assets of Eyesizwe Coal and re-listed as Exxaro. The Group
which is the largest supplier of coal to Eskom, currently supplies the
Matimba power station with approximately 14,6Mt of coal. More information
is available on www.exxaro.com.
Eskom Holdings Limited ("Eskom") is South Africa`s national vertically
integrated electricity utility, engaged in the generation, transmission,
distribution and retailing of electricity to industrial, mining,
commercial, agricultural and residential customers, as well as to
redistributors. The Government of South Africa, through the Department of
Public Enterprises is the sole shareholder. Eskom supplies 95
per cent of South Africa`s electricity and approximately 50 per cent of the
total electricity consumed on the African continent. Eskom currently sells
directly to approximately 6,000 industrial, 18,000 commercial, 70,000
agricultural and more than three million residential customers. Eskom owns
and operates a number of coal fired, gas fired, hydro and pumped storage
power stations in addition to one nuclear power station. More information
is available on www.eskom.co.za.
Trevor Arran Fani Zulu
Executive General Manager: National Spokesperson
Corporate Affairs & Investor
Relations Tel: +27 11 800 2265
Tel: +27 12 307 3292 Mobile: + 27 82 451 0457
Mobile: +27 83 609 1444 Email: firstname.lastname@example.org
Date: 29/03/2007 17:00:25 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department .