Eskom and Exxaro sign 17-year coal supply deal to boost SA's energy security

Building on their partnership, which began on 1 July 1983, Exxaro Resources and Eskom Holdings have signed a new long-term coal supply agreement (CSA), ensuring the continued delivery of coal from Exxaro’s Matla Mine to the Matla Power Station in Mpumalanga.
Exxaro Resources and Eskom Holdings have signed a new long-term coal supply agreement (CSA), ensuring the continued delivery of coal from Exxaro’s Matla Mine to the Matla Power Station until 30 November 2043. Image supplied.
Exxaro Resources and Eskom Holdings have signed a new long-term coal supply agreement (CSA), ensuring the continued delivery of coal from Exxaro’s Matla Mine to the Matla Power Station until 30 November 2043. Image supplied.

The newly concluded agreement commenced on 1 April 2026 and is valid until 30 November 2043, with the term subject to extension or reduction by mutual agreement between the parties.

Supporting SA’s energy needs

“The signing of this new coal supply agreement marks an important milestone in our long-standing partnership with Eskom and reinforces our shared commitment to supporting South Africa’s energy security needs in line with national demands and fluctuating geopolitical influencers.

“This agreement comes on the back of Eskom’s recent investment in the Matla Life of Mine (MLoM) expansion project, which strengthens the mine’s ability to sustainably supply coal to the Matla Power Station for the remainder of its life,” said Ben Magara, Exxaro CEO.

Eskom group chief executive, Dan Marokane, added that the new CSA represents a significant step forward in strengthening South Africa’s energy security.

“This agreement ensures predictability and stability in the supply of coal to the Matla Power Station, an essential component of our generation fleet, and reinforces a partnership that has supported the nation’s power system for more than four decades,” said Marokane.

“Crucially, this new contract structure is a key deliverable of Eskom’s Cost Optimisation and Revenue Enhancement (CORE) programme, which aims to drive efficiencies in primary energy procurement.

“Through improved operational performance and streamlined supply‐chain logistics, Eskom expects to realise meaningful long‐term cost savings that directly support its financial recovery and operational sustainability.

“The framework also delivers lasting socio‐economic benefits to the Mpumalanga region by safeguarding jobs and supporting economic activity in communities surrounding the Matla operations,” Marokane added.

The agreement underscores coal’s continued role in providing the baseload capacity required to stabilise the grid.

Securing a reliable supply from Matla ensures that, as the grid is decongested to enable rapid renewables penetration, Eskom maintains the operational consistency and security of supply needed to support South Africa’s developmental and industrial needs.

The agreement positions both organisations to fulfil this role responsibly in the years ahead.

Beyond electricity generation, Matla Mine remains a vital economic anchor in Mpumalanga, supporting employment, education initiatives, enterprise and supplier development, land‐use management, and infrastructure projects in surrounding host communities.

Furthermore, the agreement includes stringent coal quality specifications that ensure higher combustion efficiency at Matla Power Station.


 
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