Wedoany.com Report-Oct. 24, Keaton Mining, a subsidiary of Keaton Energy Holdings and part of the Salungano Group, has finalized a coal supply agreement (CSA) with Eskom Holdings SOC. Under the agreement, coal will be sourced from the Vanggatfontein Colliery, an opencast mining operation located in Mpumalanga, South Africa, and delivered to an Eskom-designated power station.

A total of around 6.5mt of coal will be delivered over the duration of the CSA term on an “as received basis”.

Deliveries are scheduled to begin on 1 November 2025, or at a later date if mutually agreed in writing. The contract is expected to last approximately five years and two months, concluding once the total contracted energy quantity has been delivered. Over the term of the CSA, an estimated total of around 6.5 million tonnes of coal will be supplied on an “as received basis,” contingent on the contract’s calorific value assumptions and the specified monthly and annual delivery ranges.

The Salungano Group’s board highlighted that executing the CSA is price-sensitive and will provide revenue certainty while supporting operational planning for Vanggatfontein Colliery. The agreement also forms a significant part of the group’s going-concern assessment, as referenced in the audited consolidated financial statements for the year ending 31 March 2024.

Vanggatfontein Colliery, owned by Wescoal, is an open-pit mining operation extracting coal from the No. 5, No. 4, and No. 2 seams. The colliery produces an average of 340,000 tonnes of run-of-mine coal per month, ensuring a steady supply to meet Eskom’s energy requirements.

The CSA strengthens the strategic partnership between Keaton Mining and Eskom, aligning coal production with South Africa’s energy supply needs while providing the Salungano Group with predictable revenue streams. The agreement also demonstrates the colliery’s capability to meet large-scale delivery commitments over a multi-year term.

Further details regarding the CSA will be disclosed in the Salungano Group’s financial results and other reports as deemed appropriate. The arrangement underscores the importance of reliable coal supply agreements in supporting power generation and long-term operational planning for both the energy producer and the coal supplier.

By securing this contract, Keaton Mining reinforces its role in South Africa’s energy sector and contributes to maintaining stable electricity generation through the provision of high-quality coal. The project reflects careful planning around coal production capacity, calorific specifications, and delivery schedules to meet Eskom’s operational requirements.

Overall, the agreement with Eskom represents a strategic milestone for Keaton Mining and the Salungano Group, supporting revenue certainty, operational efficiency, and sustainable management of the Vanggatfontein Colliery over the next five years.