EXXARO Resources CEO, Mxolisi Mgojo, said that without a properly functioning power utility company – Eskom – South Africa’s mining industry would cease to function.
“The current state of Eskom is going to be the one thing that is going to be the death knell of this industry,” Mgojo was cited by Bloomberg News to have said in an article republished by Yahoo Finance. Mgojo is also the president of the Minerals Council South Africa.
Mgojo was commenting at a conference organised by Business Unity South Africa, the country’s largest business lobby group. “Without fixing Eskom we don’t have a mining industry. It is as dire as that.”
Eskom has a monopoly on electricity generation and distribution, preventing mines such as Exxaro from producing the power they need to operate, said the newswire. South Africa is the world’s largest producer of platinum, and earns more that half of its export revenue from raw materials.
“We have been in discussion with the ministries around that, how we would actually go about investing our own monies in alleviating the electricity demand within the grid,” Mgojo said. “That is out there; it just needs the will from somebody else to make that happen.”
At the same conference South African president, Cyril Ramaphosa, said it was impossible for the country to ignore the advance of technology that would make self-generation by individual households and companies possible.
Eskom is drowning in debt it can’t repay and has had to institute rolling electricity blackouts due to operational defects, weighing on growth at a time when South Africa’s economy is barely expanding, said Bloomberg News.
The utility’s chairman, Jabu Mabuza, resigned on Friday after it resumed power cuts in spite of a promise to Ramaphosa that it would keep the lights on in January.
The South African government must implement economic reforms urgently to avoid losing its last remaining investment-grade credit rating and having to resort to bailouts from multilateral lenders, Business Unity President, Sipho Pityana, said in a speech at the same event. Priorities include security of energy supply, the reform of state-owned enterprises and appointment of competent leaders to manage those businesses, he said.