South Africa’s Eskom concluded new short-term coal supply agreements valid until April 2016 to use coal from Glencore, South32, and five other suppliers for its Arnot power station, Reuters reported citing Eskom’s spokesman. Among top suppliers for the plant is Exxaro Resources, with whom Eskom did not renew a 40-year contract in December, and the lesser known are Tegeta, Keaton Energy, Hlagisa Mining and Umsimbithi Mining. Eskom will announce the outcome of new short-term supply agreements, which are separate from the list of bidders for the new long-term contract, before the end of Q1 of 2016.
The 2,100MW Arnot power station, about 50km from Middelburg in Mpumalanga, had been previously fed directly from Exxaro’s Arnot coal mine on a cost-plus agreement until last December, when Eskom notified Exxaro that it would not automatically renew a 40-year-supply contract. According to Eskom, it was unable to renew the cost-plus contract due to the exorbitant coal price as well as the mine supplying below the contractual requirement, wrote Mining Review.