The deal entails supply of about 2 million tonnes per annum to the power company over an initial 8-year agreement.
The fixed price contract is valued at $US14.7 million per annum before interest, taxes, depreciation and amortization.
Kangala recently ordered all its necessary approvals including the water licence obtained this week.
The proposed open pit is expected to produce its first coal in late 2013.
Kangala holds a proven reserve of 19.5Mt and is located next to an additional 65Mt of indicated and inferred resources.
Universal is also developing the Berenice-Cygnus project in South Africa’s emerging Soutpansberg coalfield which the company says has potential to produce 10Mtpa of both primary soft coking coal and secondary thermal coal.
