Eskom meltdown puts ratings at risk
Knock-on effects pose further risk to struggling economy
SA's credit ratings outlook hangs in the balance, and growth estimates may now also be revised down following the return of rolling power blackouts this week that are expected to continue until April. The move to stage-four load-shedding, which was due to the loss of six additional units, has economists fretting about the consequences for industrial output, which accounts for just under 25% of SA's GDP. SA's foundry industry had lost 90% capacity over the past decade, and there is a massive reduction in aluminium smelting, beneficiation and chrome smelting, which have shifted to Malaysia and China. This is despite SA having 90% of the world's chrome ore. SA's smelting has dropped to less than 60% of global beneficiation, said Shaun Nel, spokesperson for the Energy Intensive Users Group of Southern Africa. Big industries have been experiencing power cuts for the past few months and now fear a substantial rise in electricity tariffs. Nel said industrial companies had been subject to 2...
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.