MEDIA STATEMENT

Eskom signs coal supply agreement with employee-owned Arnot mine for supply of coal to
Arnot Power Station

Thursday, 12 August 2021: Eskom is pleased to announce that it has entered into an agreement
with Arnot OpCo (Pty) Ltd for the supply of coal for the Arnot Power Station. In terms of the
agreement, Arnot OpCo will supply the full coal requirement for the life of Arnot Power Station. The
coal is of high quality, and if the need arises, it may be used at other stations. The contract has an exit
clause after Year 6 that may allow both parties to cancel the contract.

The agreement serves to secure coal supply and to meet the burn requirements of the power station
by conveyor belt, replacing the current supply by road from various sources on short- to medium-term
contracts, some of which were signed under emergency and urgent procurement. This transaction
paves way for Eskom to reduce the costs of operating the Arnot Power Station while securing high
quality coal at affordable prices.

“While securing affordable coal supply for the Arnot Power Station, this transaction will help create
employment opportunities for the retrenched Arnot Mine workers and entrepreneurship opportunities
for the Middleburg community,” said Sandile Siyaya, Eskom’s General Manager for Primary Energy.
“The transaction demonstrates that a mining asset curtailed by a major miner can be operated viably
in the hands of a junior miner.”

Arnot OpCo is half-owned by 1 038 former Exxaro Resources employees who were retrenched in
2015 from the Arnot Mine in Middelburg, Mpumalanga. JSE-listed Wescoal Holdings owns the other
half of Arnot OpCo.

These employees lost their jobs at the expiry of the previous coal supply agreement in 2015, which
resulted in Exxaro decommissioning the mine. Since 2016, the former employees embarked on a
process to acquire, reopen and to operate the mine.

In 2019 Eskom issued a request for proposals to the open market in order to secure coal supply to
cover the remaining operating life for the Arnot power station. Arnot OpCo submitted a proposal with a
view to reopen Arnot Colliery. The broad-based worker-led consortium effectively took over Arnot
Colliery in February 2020 upon winning the Eskom tender to re-open and operate the mine.

ENDS

Issued by: Eskom Media Desk

Tel: +27 11 800 3433/5944/6050
Cell: 083 276 0606
Email: mediadesk@eskom.co.za