| Work Detail |
Unlocking South Africa’s energy and logistics potential came into focus at Mining Indaba Transnet and Eskom’s pivotal roles in the mining sector value chain and their impact on the broader economy came into sharper focus during a panel discussion at Mining Indaba in Cape Town this week. The panel – Minerals Council South Africa CEO Mzila Mthenjane, Transnet CEO Michelle Phillips, Eskom CEO Dan Marokane, Kumba Iron Ore CEO Mpumi Zikalala as well as Rudi Dicks, Head: Project Management, in the Office of the Presidency, discussed the work being done to return South Africa’s critical infrastructure networks to effective operation, to unlock growth for the country and bring opportunities for the country’s people. The session – Unlocking South Africa’s energy and logistics for a sustainable future – assessed the work done jointly through the Presidency with the private sector, government and the state-owned entities Eskom and Transnet. Some of the achievements have been in the supply of electricity, with loadshedding largely a thing of the past (notwithstanding this past weekend’s bout). The focus now falls on restoring Transnet rail and port services to capacity by including the private sector. These successes, in turn, will allow mining to reach its full capacity, as it is a major user of both Eskom and Transnet services. Eskom’s funding challenges The power utility was recently granted an electricity tariff rise of 12.7% by the National Energy Regulator of South Africa (Nersa) – well below the 36% it requested. “The recent ask we placed before Nersa was a final attempt to move us towards cost-reflective tariffs,” he said. “At present, the returns on our assets are too low for us to invest in upkeep. We will now get back to the drawing board to deal with the sustainability of Eskom and service our debt.” Marokane said another challenge was arresting municipal debt, which was projected to reach R100 billion by the end of the financial year. “Fortunately, there is now sufficient political will to tackle that debt,” he said. Marokane described many generation successes, such as getting units from Kusile and Medupi back on stream, as well as returning 1,500MW of capacity from Koeberg back to service. Transnet putting in the hard yards Phillips said Transnet had worked hard with its people and partners to arrest a five-year decline in volumes and return its network to an acceptable standard. She said the entity still hoped to attain its target of reaching rail freight volumes of 170 million tons by the end of the current financial year from the current 152 million. The ultimate target of 250 million tons has been set for 2030. “We are on a growth trajectory thanks to mobilising our people, regenerating and motivating. We have reminded them of our purpose – to grow the economy and create jobs.” Phillips also said Transnet was excited by the possibilities of the recent agreement to find private-sector partners. “There has been robust engagement with private sector stakeholders, she said. “For our people, it’s a big change. But we are excited, and there is a lot of interest. With our partners, we know if we implement this correctly, it will have a positive impact on the country.” Regarding ports, Phillips noted that Portnet had removed freight bottlenecks at several of the country’s harbours and placed orders for sophisticated port equipment that would improve efficiencies. Reform projects driving change in South Africa Dicks said there had been significant gains under the Operation Vulindlela structural reform project because the President had adopted it as part of his personal growth agenda for South Africa. He said the project has five focus areas – energy, logistics, water, telecommunications and visa reform. He said there had been successes in all of these areas. In the area of data affordability, the cost of 1.5GB of data has recently come down by 51%. Around R500 billion in new investment had been unlocked through reforms; there was now a 22,500MW pipeline of private investment in renewable energy, and the time to obtain a water-use licence was now down to 90 days from 300. In terms of focus areas going forward, he said Operation Vulindlela had three focus areas: 1) a plan to help local governments ring-fence electricity income to fund infrastructure, 2) a plan to address spatial inequality through transport and improving housing, and 3) to continue advancing digital transformation. The need to act with urgency to improve Transnet operations Zikalala applauded the National Logistics Crisis Committee’s successes in bringing corporate leaders together to discuss the country’s needs with the government. “We now have fundamental structures in place that let us address our infrastructure challenges in a transparent manner,” she said. “We are still in something of a crisis in the bulk mining sector. But we have the forum to address it and to move with speed. We want to plan together and move with urgency, because unlocking our infrastructure potential benefits all South Africans,” she said. Mthenjane urged all South Africans to support the recovery of energy and logistics networks as it all helped unlock the contribution of mining to the country’s economy. |
