New Mine 1 launch signals long-term commitment to energy security, jobs and coal supply stability.

Diversified mining company Exxaro Resources has officially opened its New Mine 1 operation at the Matla Coal Mine in South Africa. The project is a critical pillar in sustaining South Africa’s baseload electricity supply and extending the life of one of the country’s key coal assets.

The New Mine 1 forms part of the broader Matla Life of Mine Project, a R5.236 billion investment designed to unlock remaining reserves, improve operational efficiency and secure long-term coal supply to Eskom under an extended Coal Supply Agreement.
The development comes at a pivotal time for South Africa’s energy sector, as government and industry continue balancing decarbonisation ambitions with the realities of maintaining grid stability and industrial competitiveness.

According to Exxaro, the new operation will contribute approximately 4.2 Mt of coal annually to support the reliable operation of the Matla Power Station, while preserving thousands of jobs in Mpumalanga’s coal belt.

Exxaro positions Matla as cornerstone asset

Speaking at the launch, Ben Magara said the project represented more than a mining milestone. “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.”

Magara added that the project demonstrated Exxaro’s ability to deliver complex mining infrastructure safely and on budget despite challenging operating conditions. “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 original Mine 1 operations were halted in 2016 after deteriorating safety pillars near shaft infrastructure created operational risks. The New Mine 1 project was subsequently developed to safely access remaining reserves and create a pathway for life extension at the operation.

Eskom links coal supply stability to energy transition

Dan Marokane framed the project as a key component of Eskom’s strategy to maintain generation reliability while preparing the grid for greater renewable energy integration. “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.”

Marokane also linked the project to Eskom’s broader procurement and operational reforms. “We negotiated the new contract structure as part of Eskom’s Cost Optimisation and Revenue Enhancement programme, which aims to drive efficiencies in primary energy procurement.”

He noted that the launch coincided with Eskom reaching 365 consecutive days without load shedding, a milestone the utility has repeatedly attributed to improved plant performance, disciplined maintenance and collaboration with suppliers. The relationship between Exxaro and Eskom is also expanding beyond coal supply. In 2025, the two organisations signed a memorandum of understanding focused on emissions reduction initiatives, including carbon capture technologies and other projects aimed at enabling a responsible just energy transition.

Mantashe defends coal’s role in South Africa’s economy

South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe, used the event to strongly defend the continued importance of coal mining to the national economy and energy system. Mantashe, who previously worked at Matla during his years as a trade union organiser, described the opening as deeply personal. “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.”

The minister pushed back against narratives suggesting coal mining has no future in South Africa. “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.”

Mantashe’s comments reflect the South African government’s continued position that coal will remain part of the country’s energy mix for decades, even as renewable generation accelerates.

Infrastructure investment extends mine life

The Matla expansion includes significant infrastructure upgrades aimed at improving safety, efficiency and production continuity. Key developments include:

• Construction of a box cut to access the Mine 1 working area
• Installation of a tunnel development silo feed conveyor system
• Development of an overland conveyor linked to Eskom’s conveyor network
• Construction of a new crushing and handling plant
• New employee support facilities, workshops and administration infrastructure
• Deployment of next-generation mining equipment through a short wall replacement project

Industry analysts have increasingly highlighted the importance of extending the life of existing coal operations as South Africa attempts to avoid supply disruptions while transitioning its electricity system. The Matla operation currently employs 6,174 workers, including contractors, making it one of the region’s major employers.

Socio-economic impact remains central to mining strategy

Exxaro said the Matla Life of Mine Project has already generated substantial economic benefits for surrounding communities and businesses in Mpumalanga. Since inception, the project has:

• Created approximately 1,132 local employment opportunities
• Directed R532 million toward black-owned businesses
• Supported local SMMEs and supplier development programmes
• Expanded skills development and training initiatives

The company said these investments form part of its broader strategy to ensure mining projects create long-term value beyond production outputs alone. The opening of New Mine 1 also comes amid increasing scrutiny on how mining companies manage the balance between sustaining coal production, supporting economic growth and advancing decarbonisation commitments.

For Exxaro and Eskom, the Matla expansion represents a clear signal that coal remains deeply embedded in South Africa’s industrial and energy planning, even as the sector simultaneously prepares for a lower-carbon future.