Exxaro expands Matla coal operations

Exxaro Resources has officially inaugurated the New Mine 1 operation at its Matla Coal Mine, reinforcing the company’s long-term strategy to maintain coal production, improve operational performance and contribute to South Africa’s energy supply stability

The development follows a 2016 decision to halt operations at the original Mine 1 because of declining safety conditions around the shaft pillars. The New Mine 1 project was subsequently introduced to provide safe access to remaining reserves while extending the operational life of the mine.

The project forms a central component of the broader Matla Life of Mine Project (MLOMP), a R5.236bn (approx. US$319mn) investment programme aimed at ensuring ongoing access to coal reserves, boosting efficiency and supporting coal deliveries under the extended Coal Supply Agreement (CSA) with Eskom. Operating under a cost-plus arrangement, Eskom funds the mine’s operational costs to help secure the lowest overall fuel expenses.

The newly opened mine is expected to supply nearly 4.2 million tonnes of coal annually to the Matla Power Station, supporting energy generation reliability. The Matla Coal Mine workforce currently consists of 6,174 employees, including contractors.

Exxaro CEO Ben Magara stated, “The New Mine 1 is far more than an operational milestone, for us it reflects Exxaro’s disciplined execution, long-term vision, and commitment to South Africa’s future. Our Matla Mine continues to play a vital role in supporting the country’s energy needs while creating meaningful impact through local investment, job creation, and the development of entrepreneurship. Most importantly, this milestone reflects the commitment and resilience of our employees, whose dedication to the company continues to enable us to deliver complex projects on time, to scope and on budget while making a meaningful contribution to the country and its communities.”

The project introduced several infrastructure and operational upgrades, including a box cut providing access to the Mine 1 working area, a tunnel development silo feed conveyor system and an overland conveyor linked to a newly established crushing and handling facility connected directly to Eskom’s conveyor network. Additional infrastructure includes new employee change house facilities, engineering workshops, material warehouses and administration buildings. The project also incorporated a shortwall replacement initiative featuring next-generation mining equipment.

South Africa’s minister of minerals and petroleum resources, Gwede Mantashe, attended the official opening and visited workers underground during the event.

"This is a journey back home for me. I spent six years at this mine, working here and organising here, and during that same period we achieved production records. I was here as a worker, and today I return as a Minister. People have often said that coal is a dying industry because of concerns around pollution. However, the industry continues to evolve, particularly through improvements in mining safety and ongoing investment in innovation and research. Coal miners should never be ashamed of the work they do."

Eskom group CEO Dan Marokane highlighted the significance of the collaboration between the two companies, saying, “the expansion of Matla New Mine 1 demonstrates how strategic collaboration secures South Africa’s energy future. The reliable supply from Matla ensures that, as the grid is decongested to enable rapid renewables penetration, Eskom maintains operational consistency and security of energy supply needed to support South Africa’s developmental and industrial needs. We also negotiated the new contract structure as part of Eskom’s Cost Optimisation and Revenue Enhancement (CORE) programme, which aims to drive efficiencies in primary energy procurement. This milestone comes as Eskom marks 365 consecutive days without load shedding — a testament to the impact of sustained investment, operational discipline, and partnership with Exxaro”.

Earlier in 2025, Eskom and Exxaro signed a memorandum of understanding focused on emissions reduction initiatives, carbon capture technologies and other projects supporting a responsible and balanced energy transition.

In addition to its operational objectives, the MLOMP has generated notable socio-economic benefits within Mpumalanga. The initiative has created around 1,132 local employment opportunities and directed R532mn towards black-owned businesses as part of efforts to support economic transformation. The project has also prioritised support for Small Medium Micro Enterprises and skills development programmes within surrounding communities.

The commissioning of the relocated Mine 1 operation marks a significant phase in Matla Mine’s development, strengthening its contribution to South Africa’s energy sector while reflecting Exxaro’s broader strategy for long-term growth, community development and national economic participation.