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Ex-AngloGold boss Godsell is Eskom chairman Posted: Thu, 17 Jul 2008 [miningmx.com] -- BOBBY Godsell, the former AngloGold Ashanti chief executive, is the new chairman of the embattled South African power utility Eskom, Public Enterprises Minister Alec Erwin said on Thursday. Godsell replaces former cabinet minister Valli Moosa as Eskom's chairman. The appointment is not without critics. The National Union of Metalworkers of South Africa (Numsa) said the appointment of a white person to the job did not reflect the transformation the country was undergoing. "Godsell’s strong leadership skills, business background and approach to skills will be a valuable asset to Eskom," said the predominantly white trade union Solidarity. It has been exactly a year since Godsell announced he was stepping down as the head of the world's third largest gold producer. His resignation was effective as at the end of September 2007 when he was replaced by Mark Cutifani from CVRD Inco. Godsell had been CEO of AngloGold Ashanti since 1998 and headed Anglo’s gold and uranium division since July 1995. He was with Anglo American since 1974. Godsell was a prickly chief executive, giving what he thought were silly or irrelevant questions short shrift. He was seen as sensitive to criticism. He came from a liberal arts background rather than mining, which raised questions amongst some diehard mining market watchers about his efficacy as the head of one of the world?s leading gold producers. "The idea that only mining engineers can run mining companies is a pretty odd one," Godsell once countered. He did leave behind a deeply unfavourable set of forward gold sale contracts known as a hedge book at AngloGold that the new management is spending billions of rands to reduce in size. Some say it was under his watch that the book was built up and that he should take the rap. There is no doubting, though, his leadership and business abilities. He served for two terms as the president of the South African Chamber of Mines and was chairperson of the World Gold Council, an industry body. He was also co-chairperson of the Millennium labour Council and served as chairperson of Business Unity South Africa. Sam Jonah, a former AngloGold Ashanti executive, wrote in his biography that Godsell had wanted to leave the company in 2003 for a career in academia. When he left AngloGold, Godsell said he wanted to become more involved in teaching business skills. This is the second high profile mining person to join Eskom. Ras Myburgh, the CEO of Kumba Iron Ore, a subsidiary of Anglo American, was seconded to Eskom to help it resolve its coal problems. Eksom's coal costs increased by R5bn in its financial year, and management said it was currently using 21% of short-term coal contracts compared to 2% in 2001, pushing up coal costs. Eskom has 11 operating coal-fed power plants and is recommissiong two others that are mothballed. It has a total net generating capacity of 37,761 mega watts. The agreement was for Myburgh, who has 20 years of experience both at Eskom and as head of a coal company, to work with Eskom for two years before returning to the Anglo stable. Myburgh was approached by Eskom Engineering Enterprises managing director Brian Dames in February shortly after the force majeure declaration by the power utility, which shut down the country’s mines for a week and sliced the country’s first quarter economic growth in half to 2.1%. Eskom has agreed with its 138 major clients that they would decrease consumption by 10%. Some mining companies, where job losses were threatened, have been given 95% of their normal power. Eskom said on Thursday its full-year electricity growth sales were at 2.9% compared to 4.9% previously. Eskom is battling to meet demand in Africa's biggest economy, and suffered a near-collapse of the electricity grid in January, shutting the country's gold and platinum mines for five days as the power crisis worsened, sending metal prices soaring. Eskom has said it will spend R343bn to increase its capacity. Its expansion budget will bulge to more than one trillion rand by 2026 by which time it hopes to double capacity to 80,000 MW.
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