Minerals Council welcomes Ramaphosa’s assurances that Eskom will not fail

Minerals Council welcomes Ramaphosa’s assurances that Eskom will not fail

President Cyril Ramaphosa speaks at the 2019 Minin

President Cyril Ramaphosa speaks at the 2019 Mining Indaba in Cape Town (GCIS)

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The Minerals Council has welcomed assurances by President Cyril Ramaphosa that the state will not allow Eskom to fail.

The council was reacting to Ramaphosa’s keynote address Tuesday evening at the 2019 Mining Indaba in Cape Town.

The state-run power utility, which has a R419bn debt burden, is in a financially precarious position. It does not turn a profit from selling electricity at current prices, and has asked for a 15% tariff increase each year for the next three years from the energy price regulator Nersa. 

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“Eskom’s contribution to the health of our economy is too great for it to be allowed to fail. Is is too important and is too big to fail,” said Ramaphosa on Tuesday. “Restoring and securing energy security for the country is an absolute imperative.”

Ramaphosa told the indaba that the government would be announcing what he called a “package of measures to stabilise and improve Eskom’s financial, operational and structural position” while ensuring security of energy supply for the country.

For more Mining Indaba news read Fin24’s Special Report 

The president did not say when the announcement would be made or hint at what it would contain, but he may use the State of the Nation Address on Thursday evening to present his plan to the public.

In recent weeks there have been increasing signs that the government is seriously considering breaking up or unbundling the power utility, a move that has already been criticised by some of the biggest unions. 

Earlier in the week at the indaba, Eskom CEO Phakamani Hadebe said the power utility was just too big and serious consideration needs to be given to separating out sections like generation and distribution into separate entities. 

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