Diversified natural resources company Exxaro Resources and State-owned Eskom have signed a new long-term coal supply agreement (CSA), securing the continued supply of coal from Exxaro’s Matla mine to the Matla power station until November 2043.

Matla mine first entered into a CSA with Eskom on July 1, 1983, with the agreement originally set for a period of 40 years.

In a joint media release, the parties note that the new CSA, which took effect on April 1 and is valid until November 30, 2043, ensures continued coal supply for Eskom’s Matla power station, supporting the stability of South Africa’s energy system while maintaining operational continuity at the mine.

The term of the CSA is also subject to extension or reduction by mutual agreement between the parties.

Exxaro CEO Ben Magara says the signing of the new CSA marks an important milestone in the company’s long-standing partnership with Eskom and reinforces its shared commitment to supporting South Africa’s energy security needs in line with national demands and fluctuating geopolitical influences.

He notes that the agreement comes on the back of Eskom’s recent investment in the Matla life-of-mine expansion project, which strengthens the mine’s ability to sustainably supply coal to the Matla power station for the remainder of its life.

“Exxaro is confident in the future of the operation and confirms the strategic importance of Matla as a key operation within our coal portfolio, representing our commitment to responsible resource development, and our continued focus on delivering reliable energy solutions that support the country’s economic growth, while creating lasting value for our employees, host communities and the broader economy,” he says.

“Today’s signing of the long-term CSA with Exxaro 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,” adds Eskom Group CE Dan Marokane.

Crucially, he points out, the 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 socioeconomic benefits to the Mpumalanga region by safeguarding jobs and supporting economic activity in communities surrounding the Matla operations,” Marokane adds.

As Eskom advances its recovery and sustainability efforts, the parties note that 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 parties explain that this agreement positions both organisations to fulfil this role responsibly in the years ahead.

They add that, 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.

The long-term nature of the agreement also provides the stability required to sustain ongoing investment in operational efficiency, safety standards and environmental stewardship, ensuring the mine continues to operate in a manner aligned with responsible mining practices.

Further, the agreement includes stringent coal quality specifications that ensure higher combustion efficiency at the power station.

Eskom and Exxaro say this consistency is vital for reducing the plant’s overall carbon footprint and supporting Eskom’s commitment to progressive emissions reduction.

“As Exxaro celebrates its twentieth anniversary characterised by impact beyond the surface, the organisation remains committed to working collaboratively with Eskom and other key stakeholders to support South Africa’s energy requirements, while continuing to advance its broader Sustainable Growth and Impact strategy of responsible resource management and sustainable value creation for all stakeholders as it strives to become a diversified natural resources champion in Africa and beyond,” they comment.