Dear Editor
The Democratic Alliance (DA) once again calls for Eskom to be fully unbundled, with the System and Market Operator made independent without delay.
This step is essential if we are to save South Africa’s mining sector, which is being crippled by relentless electricity price increases.
Since 2007, the cost of electricity has climbed by more than 800 percent. Mining, which contributes close to 8 percent of GDP, has taken the brunt of this burden. South Africa now has some of the highest energy prices among mining nations, making it virtually impossible to beneficiate chrome ore into ferrochrome, even though we hold the largest chrome reserves on earth.
As a result, China has overtaken us in ferrochrome production, with power prices here almost 50 percent higher than theirs.
The damage is plain to see:
- Glencore and Samancor Chrome have shut down most of their smelters, with not one of Glencore’s 22 furnaces running and only three of Samancor’s 24 still operating.
- More than 2 500 jobs are on the line at Glencore’s venture with Merafe Resources.
- The fiscus is losing billions in revenue as beneficiation stalls.
For years, industry leaders have warned government that time is running out. Glencore Alloys CEO Japie Fullard has been clear about the scale of the threat. Yet government has ignored these warnings, offering temporary price deals that do nothing to fix the real problem.
Workers have been treated as pawns in this failed approach, while livelihoods are destroyed and communities are left in despair.
The DA has said repeatedly that Eskom’s monopoly model is broken. Unbundling Eskom means creating separate, independent entities for generation, transmission and distribution.
This reform will:
- Open the grid to independent producers.
- Reduce costs through competition.
- Improve efficiency and accountability.
- Protect the economy from the collapse of a single failing entity.
The crisis in ferrochrome is an energy crisis brought about by government’s refusal to reform. The time for delay is over. Eskom must be unbundled now to cut costs, secure supply, and restore competitiveness to the industries that keep our economy alive.
Regards
Kevin Mileham MP
DA Spokesperson for Electricity and Energy