Rob Davies: Expect tough announcements on Eskom soon

Eskom is in deep trouble financially and operationally and South Africa is facing enormous challenges in the electricity industry, Minister of Trade and Industry Rob Davies said on Tuesday.

Davies was a guest speaker at a round table discussion hosted by the Department of Trade and Industry on the sidelines of Mining Indaba 2019.

“The spirit of addressing the challenges with Eskom is to grapple with the real problems and not to put these aside,” said Davies. 

“Some announcements coming soon will show we are prepared to take the bull by the horns at Eskom and make some tough decisions.

“We have to make sure that, as we face these tough decisions, we can supply reasonably priced electricity to the people of SA.”

He did not provide more details on what the announcement would say. 

'Unbundle Eskom'

Davies was speaking a day after Eskom CEO Phakamani Hadebe said the debt-laden power utility was just too big.

To make it sustainable one needs to think about unbundling it – separating out sections like generation and distribution, said Hadebe.

“That is what we are discussing with government and the special Eskom task team. South Africans should take comfort from the fact that we are discussing these challenges and we are looking at solutions that have been put on the table,” he said.

The National Union of Metalworkers of South Africa last week criticised proposals to unbundle Eskom, saying it would resist all attempts to either break up the struggling power utility or privatise it. 

'An approach of consultation'

Davies said on Tuesday a lesson many in the SA government had learnt over the years was to adopt an approach of consultation, discussion and negotiation.

“It was this kind of approach that brought about the adoption of the new Mining Charter. Not everybody loves it, but everyone can work with it,” said Davies.

“We have learnt what investors want and what we need to show them. One thing we consequently are looking into is how to improve the ease of doing business in SA to improve our global ranking in this regard.”

According to Davies, President Cyril Ramaphosa’s $100bn investment drive is also a catalyst for improving governance in SA.

As was emphasised by Minister of Mineral Resources at the same event, Davies pointed to the importance of ensuring greater beneficiation inside SA in the mining industry. “We now need to add value to our minerals. There is a need for innovation."

Also at the dti event, Minister of Science and Technology Mmamoloko Kubayi-Ngubane said SA needs to change how its mining industry operates. 

“Conventional mining, especially that of gold and platinum, will cease to be viable in the future. Therefore, SA needs to change the way it operates in the mining industry. This would have to include using the benefits of automation in order to ensure that mining operations can survive,” she said.

“We have to find SA solutions for SA problems, but could also position ourselves to lead tech solutions. SA mining extraction research provides a road map on how to collectively work together to find solutions for survival of the SA mining industry.”
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