Exxaro Resources has concluded a new long-term agreement to supply coal to Eskom’s Matla power station.
Exxaro’s wholly owned subsidiary, Exxaro Coal Mpumalanga, concluded the 17-year deal with Eskom to supply coal from Matla Colliery to the power plant.
The new agreement, which started on April 1 and runs until the end of November 2043, replaces the original coal supply agreement that was put in place in 1983 and expired at the end of June 2023.
In terms of the agreement, Matla will supply about 9.3-million tonnes of coal per year to Matla Power Station.
The mine successfully secured regulatory approvals in 2025, including the renewal of its mining right and the integrated water-use licence required to enable compliant mining operations and support long-term operational continuity, Exxaro said.
The R5.2bn Matla Life-of-Mine expansion project, which Exxaro is executing on behalf of Eskom, is progressing with targeted completion in the first half of the 2026 financial year, enabling the group to supply the contractually committed product, it added.
Earlier this year Exxaro increased its annual dividend despite lower coal prices weighing on earnings, with higher sales volumes and cost controls helping to steady the performance.
The diversified miner declared a final dividend of R10 a share, up 15% from a year earlier, taking total payouts to R18.43 a share, or R6.3bn. Profit for the year ended December fell 7% to R7.1bn and earnings before interest, tax, depreciation and amortisation (ebitda) eased 2% to R10.2bn.
The company’s coal output increased by 1% to 39.9-million tonnes while sales rose by the same margin to 39.6-million tonnes.
CEO Ben Magara said recently that the company’s next growth phase is anchored in a diversified portfolio that combines a strong coal base with expansion into manganese, renewable energy and selective exploration projects. “The new growth phase is about us having become a significant producer of manganese,” he said.
Exxaro recently completed the acquisition of manganese assets linked to the Tshipi Borwa mine in the Northern Cape, giving it exposure to one of the world’s larger producers of the steel-making material.
“The mine we have brought in is the fourth-largest manganese mine in the world, with a resource in excess of 180- to 190-million tonnes. Our growth is driven by our appetite for energy minerals, including manganese,” Magara said.
While coal remains a major contributor to Exxaro’s earnings, Magara said the company is pursuing diversification to balance commodity cycles and capture growth in other resources.
He stressed that coal continues to play a central role in the portfolio: “Even beyond 2050, with all the aggressive movements in climate action and emissions reduction, coal remains a significant contributor to the energy mix because it provides baseload power, both domestically and globally.”
He highlighted Exxaro’s position in the Waterberg, where the company controls 9-billion tonnes of coal and operates Grootegeluk, the world’s largest beneficiation complex.
He said the company is pursuing life-extension opportunities across its existing coal mines, identifying deposits beyond present boundaries that can be developed using existing infrastructure.
Additional reporting by Lindiwe Tsobo
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