The agreement is for Continental subsidiary Ntshovelo Mining Resources to supply 720,000 tonnes per year of thermal coal over the next three years.

Eskom is one of the top 20 utilities in the world by power capacity, generating 95% of the country’s electricity and 45% of the electricity used throughout Africa.

Coal will be supplied from Ntshovelo’s Vlakvarkfonstein mine in the northerly Mpumalanga province where output increased 32% in the second half of 2011.

Eskom divisional executive for primary energy Kiren Maharaj was in attendance at the official signing.

“Both the teams from Eskom and Ntshovelo worked well together to bring about this day of signing,” she said.

“Eskom’s need from suppliers like yourselves will grow significantly in the next 10-year planning horizon with a good deal of the coal being conveyed by rail to Eskom’s power stations.”