Power problems compounded by BEE requirements

Eskom depends on coal fired power stations to produce approximately 90% of its electricity and uses over 90 million tons of coal annually. The utility has attributed coal shortages among the causes of their on-going energy supply issues.

It has been reported that one of the reasons behind Eskom’s coal shortage, is that traders are struggling to get coal to Eskom due to the Black Economic Empowerment (BEE) requirements restricting companies from supplying the utility. The Mining charter and Eskom are held to different standards.

Mining companies in South Africa reportedly need to be 26% black-empowered in order to be compliant with the Mining Charter. Additionally, companies that seek to supply Eskom are expected to be 50% black owned.

The concern, however, is that businesses are bringing in ‘middle people’ or black trading companies who are then said to be buyers of the coal from the companies, later selling to Eskom at a premium. This is done as a means of circumventing the policy. The use of fronting and middle-people means that other companies would benefit without delivering true industry transformation.

Speaking on 702's John Robbie Show, Senior Coal Analyst at XMP Consulting Xavier Prevost suggests that this issue is certainly related to Eskom’s continuous load shedding problem. Prevost commends Eskom’s efforts in wanting to empower black people within the coal mining sector, but feels they need to consider alternative ways of achieving this because, currently, 'the means are not the best':

I think this whole issue is compounded by this other [load shedding] problem that Eskom has.

Prevost says that Eskom should prioritize creating more mines before the energy crisis becomes irreparable.

I think that Eskom needs to rethink their policy…they just have to put their money where it is really needed - which is to implement a new mine. That is the area where Eskom can make a big difference.

In the meantime South African’s can anticipate rolling power cuts scheduled for an indeterminate period of time to come.

Listen to John Robbie’s full interview below.

Listen to CEO of Business Unity South Africa (BUSA), Khanyisile Kweyama, unpack the 5-point plan set up by Deputy President Cyril Ramaphosa to address South Africa's energy crisis:

Visit EWN’s portal for the electricity status in your area and tips on how to survive load shedding.


This article first appeared on 702 : Power problems compounded by BEE requirements


Recommended

by NEWSROOM AI
Read More
Major medical breakthrough: New gene pegged as cause of heart attacks in youth

Major medical breakthrough: New gene pegged as cause of heart attacks in youth

This is being called the biggest medical advancement in South African cardiology since Dr Chris Barnard's first heart transplant.

Parents urged to check tertiary institutions are legit before registering kids

Parents urged to check tertiary institutions are legit before registering kids

The Council on Higher Education says parents need to be wary of the increasing number of fly-by-night tertiary institutions.

New app to detect hearing loss

New app to detect hearing loss

University of Pretoria has developed a new app which uses a smartphone to detect hearing loss.

Eskom's Power Plays

Eskom's Power Plays

Power utility Eskom has requested consumers lower use - while also bank rolling a business breakfast at R43 million.

Eskom to hike tariffs following Treasury backing

Eskom to hike tariffs following Treasury backing

Stephen Grootes had Business Day writer Carol Paton and Eskom GM Andrew Etzinger weigh in.

The #ConsideredView @StephenGrootes on Eskom

Is Eskom in trouble again? Stephen discusses his fears regarding Eskom's latest decisions.

Popular articles
[LISTEN] John Maytham gets a taste of life on board Cunard’s Queen Elizabeth

[LISTEN] John Maytham gets a taste of life on board Cunard’s Queen Elizabeth

John Maytham and his team hopped on board the luxury ocean liner, which has docked in Cape Town, during a special outdoor broadcast.

Looking for something new to do in CT? Why not consider cycling across the ocean

Looking for something new to do in CT? Why not consider cycling across the ocean

Cape Town Water Bikes is an unusual way to experience the coastline of the South Peninsula. Hop on a water bike and pedal away!

Eusebius: 'We are living in a worse nightmare than we thought'

Eusebius: 'We are living in a worse nightmare than we thought'

Eusebius McKaiser shares his views on the former COO at Bosasa, Angelo Agrizz's testimony at the Zondo Commission.

South Africans are getting poorer and poorer

South Africans are getting poorer and poorer

It's not your imagination; we’ve lost a decade. Bruce Whitfield interviews Johann van Tonder, a researcher at Momentum.

No more swiping without sweating! Discovery Vitality introduces new swipe system

No more swiping without sweating! Discovery Vitality introduces new swipe system

The health programme piloted a new tag system at the exit points in a bid to crack down on fake gym visits at a few fitness clubs.

President Mnangagwa flies in hired Dreamliner while Zimbabwe in total shut down

President Mnangagwa flies in hired Dreamliner while Zimbabwe in total shut down

Zimbabwean president Emmerson Mnangagwa is expected to attend the World Economic Forum in Davos with no plans of going home.

Woman arrives in CT after driving from Scotland to SA in her old Morris Minor

Woman arrives in CT after driving from Scotland to SA in her old Morris Minor

The journey began in Aberdeen, her father's birthplace, in June last year and ended in Mother City over the weekend.