Eskom BEE stance ‘was never policy’
An Eskom policy to procure coal only from majority blackowned coal suppliers – which influenced major mining houses such as Anglo American and South32 to divest from the local sector – was never official policy at all.
Eskom non-executive director Nelisiwe Magubane said the new board, installed in February, had looked through the Eskom policies but found no evidence of a supposed requirement that coal suppliers must be 50%-plus black-owned. “It wasn’t in any of the policies,” she told delegates at the Joburg Indaba last week. Rather it appeared to be “an aspiration”.
Under former Eskom chief executive Brian Molefe, Eskom categorically stated its coal procurement policy required all the mines that supply coal to its power stations to have a black ownership target of more than 50% throughout the life of the mine.
“It created a fear in the market that nobody without 50% black ownership could supply to Eskom,” said Xavier Prévost, a senior coal analyst at XMP Consulting.
Exxaro, the largest supplier of coal to Eskom, has in the past expressed doubt that Eskom’s 50%-plus requirement was policy when, in late 2016, it faced pressure from the utility because it announced its BEE deal had expired.
According to Eskom spokesperson Khulu Phasiwe, “Eskom’s 50% + 1 requirement is based on the shareholder BBBEE compact for procurement spend, which states that the 40% of Eskom’s spend should go to BBBEE Level 1 companies.
“Coal purchasing is the largest cost element in Eskom’s income statement, and the biggest lever for Eskom to achieve the shareholder aspiration which was endorsed in the Eskom coal sourcing strategy in 2012”.