South Africa: Exxaro Resources looks to supply coal to Eskom

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Exxaro Resources is looking to supply coal to state-owned power utility Eskom following the announcement that it was experiencing shortages at a number of its power stations.

Eskom, which has less than 20 days of coal supply in 10 of its power stations, said last month that it would enter into short-term contracts in efforts to address the shortfalls.

Exxaro, which already supplies Eskom’s Matimba, Matla and Medupi power stations, has made offers to the utility, stressing that it was primarily looking at short-term agreements.

“We do not want to get involved in long-term 10, 20, 30 – year type arrangements. We want to create flexibility whereby, when the opportunity makes sense for us to play short term into the Eskom market, we have the flexibility to do that,” Exxaro Resources CEO Mxolisi Mgojo told Reuters on Friday.

The embattled utility needs 3 million tons of coal to close its deficit and is looking to stockpile a further 10 million tons.

Eskom spokesperson, Khulu Phasiwe confirmed that the utility is in negotiations with 12 companies for coal supply and said that it hopes to see the first trucks arrive at the affected power stations by the end of October.