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JSE-listed coal miner Wescoal has entered into a long-term coal supply agreement with Eskom to supply coal for the next 10 years from its Greenfield development project, Moabsvelden.

The contract was secured with Eskom through Wescoal’s wholly-owned subsidiary Neosho Trading 86.

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The signature of the coal sales agreement (CSA) marks the conclusion of 16 months of negotiations with Eskom, which commenced early in 2018.

Moabsvelden is located approximately 5km from the current Vanggatfontein mine in Delmas and formed part of the assets acquired from Keaton Energy during 2017.

Development work, that includes box cut mining and associated mining infrastructure, will commence during Q3, 2019 with first coal to Eskom expected in January 2020.

This project is expected to contribute circa. 3 Mtpa of mined coal towards Wescoal’s production capacity and says Wescoal, “presents a new growth opportunity for all our key stakeholders, namely employees, communities and shareholders”.

The signature of the Moabsvelden CSA falls squarely into the scalability pillar wherein Wescoal announced its intention to fast track the development of internal (organic) growth opportunities.

Source: This article was originally published on our sister website Mining Review Africa