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EXX - Joint News Release - Eskom And Exxaro Sign Coal Supply Contract For

Release Date: 19/09/2008 10:00:01      Code(s): EXX
EXX - Joint News Release - Eskom And Exxaro Sign Coal Supply Contract For       
                        Medupi Power Station                                    
Exxaro Resources Limited                                                        
Registration number: 2000/011076/06                                             
JSE share code: EXX                                                             
ISIN code: ZAE000084992                                                         
ADR code: EXXAY                                                                 
JOINT NEWS RELEASE                                                              
State-owned power company Eskom and diversified resources group Exxaro          
Resources Limited (Exxaro) today signed the coal supply agreement for Eskom`s   
new base-load power station, Medupi Power Station, situated at Lephalale,       
Limpopo province.                                                               
Exxaro`s capital expenditure for the project is estimated at R9 billion and     
production is planned to begin in the third quarter of 2011 with a ramp-up to   
full production by 2014.                                                        
In terms of the agreement, Exxaro`s Grootegeluk mine, will over the next 40     
years, supply an average of 14,6 million tonnes per annum of power station      
grade coal to Medupi. The coal to Medupi will be supplied through a             
brownfields expansion of Grootegeluk mine with mining from the existing         
opencast pit continuing at an accelerated rate. The coal beneficiation          
process will be handled via two new dense medium facilities (Grootegeluk 7      
and Grootegeluk 8 beneficiation plants) which will be constructed at the        
"The investments by both Eskom and Exxaro will have a significant benefit to    
the local, provincial and ultimately the South African economy. Direct jobs     
created during construction by both investments will peak at about 9 500 with   
the Eskom investment generating 8 000 and the Exxaro investment generating      
1 500 of these jobs.  Furthermore, thousands of indirect jobs will also be      
created during the construction of the power station and the expansion of the   
mine," says Jacob Maroga, Chief Executive of Eskom.                             
"We value the co-operative and long-standing relationship that has developed    
between Eskom and Exxaro and are pleased to be able to continue this mutually   
beneficial relationship," says Sipho Nkosi, Exxaro`s Chief Executive Officer.   
"We estimate that about 550 permanent jobs will be created at the Grootegeluk   
mine," added Nkosi.                                                             
The technical and commercial teams have negotiated an agreement that has been   
ratified and approved by both the boards of both Eskom and Exxaro.              
Medupi is the first of Eskom`s new generation base-load coal-fired power        
stations and it will comprise of six 800MW generation units capable of          
supplying 4 800MW of generation capacity to the national grid.  Medupi will     
be the largest air-cooled power station in South Africa and its first           
generation unit is scheduled for commercial operation during the last quarter   
of 2011, with the last unit expected to be in operation in the first half of    
Editor`s Notes:                                                                 
Exxaro is one of the largest South African-based diversified resources          
groups, with interests in the coal, mineral sands, base metals, industrial      
minerals and iron ore commodities. The group is the largest supplier of coal    
to Eskom and currently also supplies the Matimba power station with about       
14,6Mtpa of coal from its Grootegeluk mine.  www.exxaro.com                     
Eskom and the Medupi Power Station                                              
Eskom, the state owned electricity utility, is in the process of a major        
capital expansion programme to ensure the sustainability of supply of           
electricity.  The Medupi sod-turning celebration was held in August 2007 and    
since then site work has proceeded as scheduled. The boiler contract was        
awarded to Hitachi Power Africa in October 2007 and the turbine order has       
been placed with Alstom S&E.                                                    
Exxaro:                                Eskom:                                   
Trevor Arran                           Fani Zulu                                
Executive General Manager:             Senior General Manager:                  
Corporate Affairs & Strategy           Group Communications                     
Tel:      +27 12 307 3292              Tel:      +27 11 800 2265                
Mobile:   +27 83 609 1444              Mobile:   +27 82 451 0457                
E-mail:   trevor.arran@exxaro.com      Email:    fani.zulu@eskom.co.za          
Ernst Venter                                                                    
Executive General Manager:                                                      
Business Growth                                                                 
Tel:      +27 12 307 4322                                                       
Mobile:   +27 83 609 1313                                                       
E-mail:   ernst.venter@exxaro.com                                               
19 September 2008                                                               
J.P. Morgan Equities Ltd                                                        
Date: 19/09/2008 10:00:01 Supplied by www.sharenet.co.za                     
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