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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")                                                 
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   
    chief executive.                                                            
"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.                                               
    Editor`s Notes:                                                             
    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.                                            

    Exxaro                         Eskom                                        
    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: fani.zulu@eskom.co.za                 
Date: 29/03/2007 17:00:25 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  

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