Energy resources company Resource Generation (Resgen) has signed a 20-year export coal offtake contract with Valu Investments, a special purpose vehicle that will be jointly owned by entrepreneur Jaimin Vyas and India-based IL&FS Energy Development Company.

Under the deal, Valu will buy one-million tons of export coal per annum from Resgen’s Boikarabelo mine, located in South Africa.

Following the commencement of stage 2 production, the volume will increase to two-million tons per annum. Coal prices under the deal will be set by reference to an internationally recognized index during the time of each shipment.

In conjunction with the latest agreement, Resgen’s 0.5 million tons per annum contract with Bhushan Steel has been terminated.

In addition, Valu has agreed to undertake feasibility studies for the development of both a 200MW and a larger 1,200 MW coal-fired power station to be located adjacent to the Boikarabelo mine.

Resgen has provided Valu with the right to own, build and operate both of the coal fired power stations as an independent power project.