South African coal mining company Arnot OpCo (Pty) Ltd (“mining company”) has entered into a long-term coal supply agreement with Eskom to provide coal for the next ten years from its Middelburg based mine. The coal supply agreement (CSA) marks the conclusion of months of negotiations with the power utility, which commenced mid-2020 following the company’s launch through a consortium led by Exxaro’s former employees, who were retrenched in 2015 when Arnot mine was decommissioned. The former employees own 50 per cent of the mine through a trust and a company they established called Innovators Resources. The balance of the mine is owned by mining company Wescoal.
As part of the agreement, Arnot OpCo will deliver coal to Eskom’s Arnot power station through conveyor belts. This method of delivery will minimise costs for both the power utility and the mining company. The signing of the CSA is a big boost for the mining company, its ex-employees, and Middelburg’s neighbouring community, where it operates. It will result in joint economic growth as part of the company’s shared value model. Bontle Aphane, Arnot Opco’s CEO, said: “Before Arnot mine was shut down, it had been the primary source of income for many in this area. With this significant CSA signing, we plan to hire more people from the community, as well as ex-employees – improving their economic prospects again and increasing our staff complement.” The Arnot Opco team has been working tirelessly since it took effective ownership of the mine, de-watering the underground sections that were flooded and re-establishing the surface infrastructure in preparation to supply coal to the power station.