South Africa-based Continental Coal has announced that its joint venture partner Ntshovelo Mining Resources (Ntshovelo), which operates Vlakvarkfontein Coal Mine, has entered into a coal supply agreement with South African state utility company Eskom.
According to the agreement, Ntshovelo will supply 720,000 mt of thermal coal each year for some of Eskom's power stations, over an initial three-year period starting from March 1, 2012.
Vlakvarkfontein Coal Mine has become one of the 25 direct suppliers of coal to Eskom in South Africa. Eskom is one of the top 20 utility companies in the world by power generation capacity, generating around 95 percent of the electricity used in South Africa and about 45 percent of the electricity used in Africa.
As SteelOrbis previously reported, South Africa has been struggling to meet demand for power as new power plants meant to plug the shortfall in supply have been delayed. Supply will remain vulnerable until the first units of Eskom's new stations become operational next year.