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Rsg - Resource Generation Limited - Resource Generation`s First Off-take

Release Date: 08/06/2011 09:47:08      Code(s): RSG
RSG - Resource Generation Limited - Resource Generation`s first off-take        
contract increased to 139 million tonnes                                        
Resource Generation Limited                                                     
ACN 059 950 337                                                                 
(Incorporated and registered in Australia)                                      
(Registration number ACN 059 950 337)                                           
Share code on the JSE Limited: RSG ISIN: AU000000RES1                           
Share code on the Australian Stock Exchange Limited: RES ISIN: AU000000RES1     
(JSE short name: "Resgen" or "the Company")                                     
Resource Generation`s first off-take contract increased to 139 million tonnes   
New power station may bring forward stage 2 expansion of Boikarabelo mine       
Resource Generation Limited, which is developing one of South Africa`s largest  
remaining coal deposits, has today signed an agreement with Integrated Coal     
Mining Limited, part of India`s RPG Group, to extend Integrated Coal Mining`s   
purchases of thermal coal from Resource Generation`s planned Boikarabelo mine to
139 million tonnes from 37 million tonnes. The purchases will take place over 38
years, up from 20 years in the original contract signed in September 2010.      
The initial off-take of 37 million tonnes has increased to 73 million tonnes and
will begin when the Boikarabelo mine commences production, which is currently   
scheduled for late 2013.  The balance of the additional off-take of 66 million  
tonnes will begin after the mine`s stage 2 expansion. The price of each shipment
will be based on the international market price at the time.                    
Stage 2 of the mine`s development envisages doubling production to around 40    
million tonnes per annum of run-of-mine coal. Beneficiating this to maximise    
production of export quality coal will also generate an equivalent volume of    
domestic product.                                                               
CESC, the flagship power company of the RPG Group, is beginning a feasibility   
study for construction of a 2x660MW coal-fired power station adjacent to the    
Boikarabelo mine to supply power to the South African grid. This proposed power 
station would use around half the additional domestic product, thereby          
underpinning plans to develop Stage 2 and maximise export coal production.      
Additionally, Boikarabelo intends to install its own small-scale fluidised bed  
coal-powered power station at the mine site to supply power for mining          
operations.  CESC has indicated it is prepared to assist with this project.     
A wholly-owned subsidiary of CESC, Bantal Singapore Pte Limited, has agreed to  
subscribe $10 million for 12,195,122 shares in Resource Generation at $0.82 per 
share, representing approximately 4.8% of the company`s issued capital.         
Following this issue, RPG Group will have an interest of 11.6% in Resource      
Generation.                                                                     
Paul Jury, managing director of Resource Generation, said: `At a time when we   
are progressing discussions with Transnet for the transport of both stage 1 and 
stage 2 product and with Eskom over long-term coal supply, these developments   
help underwrite the expansion of our Boikarabelo mine and unlock its potential  
as a significant supplier of coal to both export and South African domestic     
markets. They represent a further vote of confidence by CESC in Boikarabelo`s   
future and position us to expand the mine earlier than otherwise may have been  
possible, providing positive returns to shareholders and benefiting the South   
African economy.`                                                               
Integrated Coal Mining, Bantal Singapore and CESC are part of the RPG Group, one
of India`s most respected industrial groups.  CESC is India`s third largest     
power utility, with a current installed generating capacity of 1225 MW serving  
nearly 2.5 million consumers across the twin cities of Kolkata and Howrah.  Its 
published growth plan envisages an increase in its installed generating capacity
to 5745 MW. Founded in 1899, the company introduced thermal power to India.     
The RPG Group is a diversified industrial group with a market capitalisation of 
approximately $US2.0 billion and annual revenue of approximately $US3.5 billion.
8 June 2011                                                                     
Sydney, Australia                                                               
Contacts                                                                        
Paul Jury, Managing Director on (02) 9376 9000 or                               
Steve Matthews, Company Secretary on (02) 9376 9000                             
Media enquiries                                                                 
Anthony Tregoning, Financial & Corporate Relations on (02) 8264 1000            
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited                   
Resource Generation is an energy resource company, primarily with coal interests
in South Africa and Tasmania.  Its current priority is to develop its planned   
Boikarabelo mine in the Waterberg region of South Africa where there are        
probable reserves of 744.8 million tonnes of coal on 35% of the company`s       
tenements.                                                                      
Date: 08/06/2011 09:47:08 Supplied by www.sharenet.co.za                     
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