EDITORIAL: Eskom coal a burning issue
The 51% requirement for new coal contracts puts SA’s security of supply at risk
The unwinding of coal miner Exxaro’s decade-old black economic empowerment (BEE) ownership deal and the announcement of a new replacement deal highlights all sorts of difficult questions about Eskom’s approach to its coal supply chain as well as about the government’s BEE policies, particularly in relation to the mining industry. Exxaro had been an empowerment star of the mining industry, an example of how large mining companies could work together to create a majority black-owned coal company that was a key supplier to Eskom and the export market. But the empowerment deal struck in 2006 matured late in 2016 and Exxaro has found it is impossibly challenging to fund another deal that would again achieve more than 50% black ownership. It has proposed to unwind that deal in a way that would minimise the damage to its share price and give the original owners flexibility, while instituting a replacement deal to create a new BEE vehicle that would own 30%. That is comfortably ahead of the...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.