North Macedonia’s state-owned power utility Elektrani na Severna Makedonija has agreed a coal supply deal with Kosovo’s* power corporation KEK.
Following intensive negotiations between the two companies and a decision by the Government of North Macedonia, Elektrani na Severna Makedonija (ESM) finalized a three-year strategic agreement with Kosovo Energy Corp. (KEK), according to ESM.
Under the contract, the company secured a concession at the Obilić mine along with the right to extract approximately 3,000,000 tonnes of coal over the next 36 months. The agreement was officially signed by Lazo Uzunčev, General Manager of AD ESM, and Gramos Hashani, Chief Executive Officer of KEK.
Fixed price of EUR 24.4 per tonne
The partnership involves a guaranteed, fixed price of EUR 24.4 per tonne of coal during the entire tenure, with precisely defined quality parameters serving as the basis for purchase and sale.
Guaranteed volumes and a set contractual price will directly shield the domestic power grid from shortages of high-quality coal required for thermal power generation, while offering protection against frequent and severe price volatility on international energy exchanges, ESM stressed.
The company expects substantial financial savings by procuring coal at the most favorable market rate with superior technical specifications compared to previous transactions, the update reads.
Financial gains will be improved by reduced fuel oil consumption
ESM explained that utilizing coal from Kosovo* is set to significantly boost the operational efficiency of its coal power plants. This is expected to add annual output of 800 GWh of electricity and generate roughly EUR 57 million in revenue.
The financial gains are expected to increase through cost savings stemming from reduced heavy fuel oil use in coal combustion. North Macedonia will achieve indirect environmental benefits and financial savings, cutting annual CO2 emissions by 923,000 tonnes due to lower coal burn and by an additional 55,980 tonnes through reduced heavy fuel oil usage, the utility calculated.
Of note, Serbia’s power utility Elektroprivreda Srbije (EPS) has been importing coal from the region and from around the world for its thermal power plants. Back in 2022, President of Serbia Aleksandar Vučić offered to supply electricity to Prishtina in exchange for coal, or to pay for it directly, but the proposal was rejected.
Uzunčev: The Obilić coal basin represents one of the largest high-quality lignite deposits globally
Lazo Uzunčev, General Manager of ESM, noted that the company is working on consolidating coal mines to ensure stable annual electricity production over the period 2027–2030.
Annual external coal procurement, supplementing domestic production, is estimated at 1.4 million tonnes, broken down into 600,000 tonnes for TPP Oslomej and 800,000 tonnes for TPP Bitola, he added.
Uzunčev explained that KEK is expected to deliver a maximum of 800,000 tonnes per year.
Public call by the end of August
“By the end of August at the latest, we will publish a public call under the public procurement law to select a firm that will handle excavation, quality analysis, loading at designated fields in the Obilić mine, as well as transport, and unloading at the TPP Bitola and TPP Oslomej coal yards,” he stressed.
The Obilić coal basin represents one of the largest high-quality lignite deposits globally, with extremely low sulfur and ash content and an average calorific value of around 1,950 kcal/kg, according to him.
This aligns with the boiler specifications at TPP Bitola and TPP Oslomej, he added.
In parallel with coal procurement, an intensive recovery plan is underway to overhaul mining machinery and rehabilitate neglected open-pit mines.
“Our mines were systematically damaged over a seven-year period ending in August 2024. Coal extraction included minimal overburden production, operations outside core and supplementary mining designs, and complete neglect of primary and auxiliary machinery as well as mining systems,” Uzunčev pointed out.
