SOUTH African banks Nedbank and Standard Bank should be compelled to invest in building new coal mines, said Bloomberg News citing the comments of Enoch Godongwana, ANC head of economic transformation.
“They are not going to put money in coal any more,” said Godongwana in an interview with Carte Blanche, a weekly television news programme in South Africa. The Bloomberg report was republished on BusinessLive.
“To me, that’s an invitation for prescribed assets,” said Godongwana. The ANC is looking at whether pension funds should be forced to invest in certain developmental projects.
South Africa relies heavily on the fuel for power generation and has 66 billion tons of coal reserves, but Eskom, the state power utility, has said new mines are not being opened quickly enough to ensure supply for its power plants. “Who determines policy? A government of the day determines policy,” said Godongwana. “You can’t therefore have individuals determine what is the policy of the country.”
“Most investors and local business leaders appear to think that prescribed assets will never end up happening,” said Peter Attard Montalto, head of capital markets research at Intellidex. “This interview seems to suggest otherwise and in a surprisingly specific way on coal,” he told Bloomberg News.