EXXARO’S THABAMETSI POWER PROJECT A PREFERRED IPP BIDDER

Pretoria, 12 October 2016

Exxaro Resources Ltd (“Exxaro”) today expressed its delight at Monday’s announcement by the Minister of Energy that the Thabametsi Power Project has been selected as a preferred bidder in terms of the first bid window of South Africa’s Coal-Baseload Independent Power Producer Procurement Programme (“CBIPPPP”). The coal-fired power station will be built near Lephalale, Limpopo Province, adjacent to Exxaro’s existing Grootegeluk Complex. It will produce 557.3MW (net) of electricity for the national grid from coal supplied by Phase 1 of Exxaro’s planned Thabametsi Mine. Exxaro will only be responsible for the supply of coal for a contractual period of 30 years.

Thabametsi Mine Phase 1 will be developed at an approximate cost of R3 billion to supply approximately 3.9 million tons of coal per year at full capacity. The new mine is scheduled to produce its first coal in Q2/2021 (and ramp-up until end 2022), in line with the development ramp-up schedule of the power station, which is expected to be operational in 2021. Thabametsi’s development creates opportunities to supply coal to other coal IPPs in the Waterberg that could bid in Window 2, as well as the mining of high value coal seams for the export market.

Mxolisi Mgojo, Chief Executive Officer of Exxaro Resources says he is thrilled. “This is an exciting milestone for Exxaro and in realising our vision of creating jobs and powering economic development in South Africa. As the largest supplier of coal to Eskom, we are already integrated in South Africa’s energy value chain and look forward to being able take advantage of the opportunities provided by current regulatory developments in the mineral and energy sectors to develop a coal mine that can supply new power-generating capacity. We have played to our strength of coal production and partnered with competent entities such as Marubeni and KEPCO for the development of the power plant. We anticipate working closely with all the relevant authorities to make this project a success for the benefit of all in South Africa.”

Ends

Editor’s note:
Exxaro is a South African-based diversified mining company listed on the JSE and included in the Responsible Mining Index. Our portfolio of coal operations includes mines in Mpumalanga and the Waterberg (Limpopo) supplying to Eskom, other domestic markets and the export markets. Our investment portfolio also includes a 50% interest in Cennergi Pty Ltd, a joint venture with Tata Power, which has developed two wind farms with a combined generation capacity of 229MW (10% of the currently installed capacity of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Exxaro recognises the challenges and risks presented by climate change as well as the imperative for securing electricity supply for the socio-economic development of South Africa. We subscribe to the Carbon Disclosure Project for the implementation of emissions reduction strategies for our coal operations. Our business outlook will see us continue to develop and grow through opportunities that support the national electricity development and emissions reduction strategies of the country with the unfolding of the Integrated Energy Plan.

For more information visit www.exxaro.com

Enquiries:
Mzila Mthenjane
Executive Head: Strategy & Stakeholder Engagement
Tel: +27 12 307 4481
Mobile: +27 83 417 6375
Email: mzila.mthenjane@exxaro.com

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