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Exxaro seeks funding from Eskom for Matla Coal

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Johannesburg - Exxaro Resources [JSE:EXX] is in talks with South Africa’s power utility to obtain more funds to further develop its Matla coal mine after the electricity provider changed the model it uses to obtain the fuel for its plants.

Large capital projects at Matla in the country’s eastern, coal-rich Mpumalanga province “remain unfunded” by Eskom Holdings, Exxaro said in a statement Tuesday. While the operation’s first mine has been idled because of a lack of funds, its second and third shafts will probably produce 8.5 million metric tons in the year ended June 30, less than the 10.1 million tons the utility contracted.

“We continue to engage Eskom to provide the required capital funding and are considering available recourse” in terms of the coal-supply agreement, it said.

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