A contract for Exxaro Resources Limited to supply coal for Eskom's Limpopo Medupi power station was signed on Friday.
"Exxaro's capital expenditure for the project is estimated at R9-billion," the two parties said in a statement.
Exxaro's Grootegeluk mine would, over the next 40 years, supply an average of 14,6 million tons a year of power-station grade coal to Medupi.
Production was scheduled to begin in the third quarter of 2011, with full production expected by 2014.
The contract should create about 9 500 direct jobs.
"Thousands of indirect jobs will also be created during the construction of the power station and the expansion of the mine," Eskom chief executive Jacob Maroga said in the statement.
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Exxaro's chief executive Sipho Nkosi said about 550 permanent jobs would be created at the Grootegeluk mine.
Medupi is the first of Eskom's new generation base-load coal-fired power stations and will be the largest air-cooled power station in SA.
It comprises six 800MW generation units capable of supplying 4 800MW of generation capacity to the national grid.
Commercial operation of its first generation unit is scheduled for the last quarter of 2011.
The last unit is expected to be in operation in the first half of 2014. - Sapa
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