WESCOAL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2005/006913/06)
Share code: WSL
(?Wescoal? or "the Group")
Long-term coal supply agreement secured for Elandspruit Colliery
Shareholders are referred to prior SENS announcements, most recently on 2 June 2016 wherein
Wescoal indicated that it was in discussions with Eskom to finalise a long-term coal supply
agreement linked to its flagship Elandspruit colliery. The Elandspruit colliery, which produced first
coal in July 2015, has effectively been supplying coal to Eskom through short-term contracts since
September 2015 while the long-term coal supply agreement was being finalised.
Wescoal is very pleased to announce today, that it has successfully concluded these negotiations
and a long-term coal supply agreement (?CSA?) has been signed with Eskom Holdings SOC Limited.
The terms of the CSA inter alia include:
- In order to ensure uninterrupted coal supply, the commencement date will be 1 November
2016, at the conclusion of Wescoal?s current short-term coal supply contract with Eskom.
The CSA has a five year duration which allows Wescoal to enter into long-term projects with
certainty around cash flows.
- Some 7.8 million tons of coal beneficiated at Wescoal?s Processing Plant will be delivered to
Eskom during the life of the CSA.
- Wescoal is obliged to transform its BEE ownership to more than 50 percent by end
December 2016 and is well advanced in achieving this strategic goal.
- Wescoal needs to comply with all regulatory and licensing requirements during the life of
the contract. The current water use license at Wescoal?s Processing Plant expires in March
2017. Wescoal has submitted documents to the relevant authorities in support of ensuring
that the renewed water use license is in place timeously.
Waheed Sulaiman, CEO of Wescoal said: ?This brings to fruition a major project for the Wescoal
team. This long-term position significantly de-risks future cash flows and in the short to medium
term enables us to repeat the results achieved during the second half of FY16?.
17 August 2016
Nedbank Corporate and Investment Banking
Date: 17/08/2016 10:48:00 Supplied by www.sharenet.co.za
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