Eskom must end cheap electricity for smelters
A recent Reuters report shows the country’s power supply is still held hostage to the unholy contract signed with BHP Billiton in the late 1980s to supply power to its Hillside and Mozal aluminium smelters.
In a nutshell, that contract sold a huge chunk of power for peanuts to process imported bauxite in countries without any large-scale aluminium industry for the sake of a handful of jobs in Richards Bay and Maputo.
Without delving into the murky depths of that contract, there can be little doubt that there was involvement of some very suspect political influence, probably engineered by the Gencor characters who had converted their company into Billiton.
Surely the country and Eskom have the right to renege on such a contract and restore the power supply to its rightful owners, the people and productive power consumers of South Africa?
There would be little point in renegotiating the contract as the price that should be paid for the power would eliminate any justification for the existence of those smelters, originally only justified by the give-away price in the contract, which Eskom still refuses to make public despite its origins being in the apartheid era.
BHP Billiton might howl in protest at the loss forced on it, either by uneconomical production or early plant closure, but they’ve already made massive profit at South Africa’s expense. It just might be a wake-up call to the world’s monopolistic metal processors that developing countries and their precious resources cannot be abused at the will of mega corporations. Free markets are all good and well but the time has come to rein in corporate rape.
We can only be thankful that common sense prevailed in the saga of the muchvaunted aluminium smelter as the anchor tenant at Coega. Maybe the would-be smelter owners concluded that the country could not be relied on to supply power, irrespective of whether it was given away or not, and that their investment would not be secure. Eskom must be prevailed on to force the same conclusion on BHP Billiton.
Eskom’s dismal failure in performing standard turbine tests at Duvha destroyed about half of the utility’s capacity to supply the aluminium smelters. Eskom and BHP Billiton make good bed fellows! ROGER TOMS HOUT BAY