COMPANY COMMENT
Eskom needs to open its generation business to private operators
If miners take operations off the grid, the problems at Eskom will be exacerbated as key customers find alternatives, depriving Eskom of steady revenue
There is a level of pragmatism underneath the frustration felt by mining company executives towards Eskom. While the criticism levelled at Eskom’s board for its management of SA’s most critical business is unequivocal and the annoyance palpable, there is no stampede by mining company executives to remove themselves from the grid. The alternatives are expensive and unreliable in the case of renewable energy options. The size and cost of solar arrays to power mines and processing plants makes this option one that would need offtake for two or three decades. Years ago major mining companies such as Anglo American and Xstrata (now taken over by Glencore), which had large coal businesses, spoke to Eskom and the government about setting up independent power producers, putting electricity into the grid as well as securing reliable and cost-effective power for their energy intensive businesses like smelting and refining platinum group metals or producing ferrochrome. Those talks went nowher...
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