Australia’s Firestone Energy and its black-owned joint venture (JV) partner Sekoko Coal have signed a memorandum of understanding (MoU) with power utility Eskom for a 30-year coal supply agreement.

Under the terms of the deal, the partnership will supply coal from its Waterberg Coal Project in the Lephalale area of Limpopo, South Africa, to two Eskom power stations in the Mpumalanga Province.

The Waterberg Coal Project comprises eight farms in the Waterberg coalfield totalling some 7,979ha with a proven JORC resource of 1.8bn tonnes.

The JV will supply a minimum of 10t of thermal coal on a free on rail (FOR) basis annually to Eskom’s two designated power stations in the Mpumalanga area by way of production, reports Businesslive.

Coal production is expected to start in 2014, with an expected production rate of 10t per annum of coal over a period of five years.