R5.2bn Matla Mine Investment Aims To Extend Coal Supply And Improve Operational Safety

Exxaro Resources’ new Mine 1 in Mpumalanga will supply about 4.2 million tonnes of coal per year to Eskom's Matla Power Station. Image supplied.

The mining company decided to stop production at the old Mine 1 in 2016 due to deteriorating safety pillars near the shaft infrastructure.

This led to the development of the New Mine 1 project to safely access the remaining reserves and develop a life-expansion pathway for Mine 1.

The New Mine 1 is part of the Matla Life of Mine Project (MLOMP), a long-term R5.236bn investment. This project aims to provide safe, continued access to coal reserves, improve efficiency, and ensure delivery, in line with the extended coal supply agreement (CSA) with Eskom.

Commitement to SA

As a cost-plus operation, Eskom is contractually responsible for funding the mine’s costs to ensure the lowest possible overall fuel cost.

“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,” said Exxaro CEO Ben Magara.

“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.”

This project has successfully delivered key infrastructure and operational enhancements.

No shame in coal mining

The Matla Coal Mine employs 6,174 employees, including contractors.

While visiting the workers underground at the mine opening, the Minister of Minerals and Petroleum Resources, Gwede Mantashe, said that coal miners should never be ashamed of their work amid environmental concerns.

“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.”

Securing SA’s energy future

Eskom also signed an MOU with Exxaro in 2025 to collaborate on emissions reduction, carbon capture and other initiatives to drive a responsible, just energy transition.

Eskom’s group chief executive, Dan Marokane, said, “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 loadshedding — a testament to the impact of sustained investment, operational discipline, and partnership with Exxaro.”

Beyond operational performance, the MLOMP has delivered significant socio-economic value in Mpumalanga.