Blow to Billiton in Eskom price case

[] — Johannesburg – On Monday BHP Billiton asked the South Gauteng High Court in Johannesburg summarily to reject Sake24’s application on technical grounds, but Judge NF Kgomo decided that he wanted to hear the entire court application owing to its huge public interest.

Sake24 specialist reporter Jan de Lange is asking the court on behalf of Media24 to force Eskom, in terms of the Promotion of Access to Information Act (Paia), to divulge the pricing formula according to which some 5.7% of Eskom’s available electricity is being delivered to two of Billiton’s aluminium smelters – Hillside in Richards Bay and Mozal in Mozambique.

De Lange is also asking for the identity of the signatories to the contracts, as well as the term of the contracts, to be revealed.

On June 30 2009 Eskom had already been asked to provide information about its supply agreements with Billiton’s Hillside and Mozal aluminium smelters.

This application, as well as a second request on September 18 2009, had been rejected on grounds of objections by Billiton.

Advocate Paul Kennedy SC for Eskom told the court that Eskom was not opposing De Lange’s application and would therefore not take part in the proceedings. The utility would abide by the court’s decision.

Advocate Frank Snyckers for Billiton argued that the court application should fail because more than 180 days had elapsed after the rejection of the first request submitted to Eskom.

But Advocate Stephen Budlender for De Lange and Media24 argued that Eskom had handled the two requests separately and that the second should therefore be treated as a new, independent request.

He said that at no stage during its handling of the second request had Eskom referred to the first. He explained further that the Paia application was based on the rejection of the second request and had therefore been submitted within the prescribed period.

Billiton had in no way been prejudiced by the application being submitted after 180 days, said Budlender.

The constitutionality of several Paia sections was also discussed.

Budlender argued that requirements for Paia applications based on the public interest might be unconstitutional. Billiton contested this.

‘Enormous damage’

Billiton also argued that it would suffer enormous damage if the pricing information were disclosed, and that the publication of the names of the signatories would violate their privacy.

Budlender denied this and pointed out that Eskom had suffered enormous losses as a consequence of its exposure to the contracts because they had been linked to derivative instruments – including the price of aluminium on the London Metal Exchange.

Budlender said that it was widely believed that ordinary South Africans were in fact subsidising Billiton because of these contracts; that the contracts were instrumental in endangering Eskom’s future sustainability, and that they played a significant role in the higher prices that ordinary electricity consumers now had to pay.

Snyckers pointed out that the contracts had been concluded at a time when Eskom had had surplus electricity that it was unable to sell and that the contacts had therefore made commercial sense.

– Sake24

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