ELECTRICITY FOR SMELTER
Time to engage Eskom on contract, says South32 chief
This is the best time to engage Eskom on a disputed electricity contract at South32’s Hillside aluminium smelter because the pressure around supply has tapered off due to an economic slump and improved efficiencies at the power utility, says the miner’s CEO, Graham Kerr. Eskom and South32 are locked in argument about the duration of an electricity supply agreement that largely insulates the aluminium producer from price hikes as Eskom seeks approval from the National Energy Regulator of SA for a 20% hike in tariffs. The aluminium, alumina and bauxite business was one of the star performers in the 2017 financial year, earning $2.8bn in revenue and contributing 35% of the group’s earnings before interest, tax, depreciation and amortisation. The load shedding from Eskom as its electricity generation battled to keep pace with demand had become a "thing of the past", Kerr said. But there was one remaining problem with Eskom and that was the contract for Hillside, which was complicated by...
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