Electricity public utility Eskom is seeking coal bids for its Arnot Power Station in Mpumalanga, South Africa, after notifying Exxaro that the coal supply agreement (CSA) will not be renewed when it expires this month.
Exxaro and Eskom ended the agreement due to a disagreement between them on the expiry date of the CSA.
During discussions under the MoU, Eskom advised Exxaro on 8 September that the agreement will end on 31 December.
Furthermore, Eskom instructed Exxaro to begin the closure process of the Arnot mine.
After receiving correspondence from Eskom, both companies sought clarity on the continuation of the relationship at the mine, the closure process, as well as procedures moving into 2016 and beyond.
Following a meeting on 30 November, Eskom confirmed that it will no longer take any coal from the Arnot mine after the expiry date.
As Eskom owns the Arnot mine, it will be liable to for all costs related and incidental to the site's closure.
The coal-fired Arnot Power Station is operated by Eskom, with materials from the Arnot mine directly feeding the station.
Image: Arnot Power Station in Middelburg, South Africa (coal plant). Photo: courtesy of Gerhard Roux.