South Africa's limping economy is likely to be further crippled unless the price of electricity is brought down. Eskom', which provides about 95% of South Africa's power, saw energy costs increase by 17% in its most recent financial year, due to higher coal charges and increased production from independent power producers.
Minerals and Energy Minister, Gwede Mantashe
Therefore, various government departments are in talks with both coal and renewable energy producers to ask for lower-cost supplies as the government tries desperately to resuscitate the country’s ailing power utility.
“Government and industry must actively work together in finding and implementing proposals for the betterment of the economy and the creation of the much-needed jobs.
“We are talking to them, we are not instructing them. The steps are, one you talk to coal producers, they make a commitment, talk to renewables, they make a commitment, Minerals and Energy Minister, Gwede Mantashe said at the Joburg Indaba.
Coal producers plan more talks with the government over the supply and cost of the fuel, according to the Minerals Council South Africa, the country’s mining lobby.
“Careful consideration is being given to being mindful of competition regulation,” it said in a statement.
Mining still an attractive investment
Mantashe said reliable and secure supply of energy for the growth of the mining sector remains imperative.
“The mining and energy industry remain the bedrock of the South African economy. It is in our mutual interest that these sectors are provided with the necessary support to ensure they contribute positively to our country’s growth and development aspirations.”
He added that South Africa is still an attractive mining investment destination. “In 2018 alone, South Africa’s mining sector received over $3.2bn in investments, which created an estimated 5,000 jobs. We must continue to prospect and explore the world-class mineral deposits we have.”