BIZ IN BRIEF

Currency woes

Emerging market contagion continued this week. The MSCI emerging market index fell for the fifth time in six days, Bloomberg reported. South Africa’s rand went past R15.50 to the dollar after the announcement of a technical recession by Statistics South Africa on Tuesday. The Turkish lira reached 6.57 to the dollar, the lowest since August this year. Argentina’s peso also suffered heavy losses and the Indonesian rupiah hit lows last seen two decades ago, according to Reuters.

Coal crisis

The University of Cape Town’s Energy Research Centre has released a study on the coal transition in South Africa. It found that the coal mining and coal-fired electricity industry is “in a state of crisis”, according to a press statement.

Rising input costs and energy insecurity have made coal increasingly less competitive for generating electricity and could place thousands of jobs at risk, the report found. It suggested a coal transition is already underway and the closure of coal plants and mines is inevitable.

Eskom’s coal costs have increased by 300% in real terms in the past 20 years, which “has put Eskom under increasing financial pressure and contributed to their current financial position”, said Jesse Burton, lead researcher of the report. “Rising coal costs, coupled with cost overruns at Medupi and Kusile, have left Eskom with little option than to hike tariffs, which in turn obviously hurts consumers.”

Burton said the government needed to re-skill workers to limit the effect of the transition.

Sweet bitter