CAPE TOWN – Mineral Resources and Energy Minister Gwede Mantashe said South Africa remained a highly attractive destination for investment in mining but a secure energy supply was crucial.
Mantashe was speaking during debate of President Cyril Ramaphosa’s State of the Nation Address (Sona) on Tuesday.
He said about 60 mining projects with an investment value of more than R110 billion were in the pipeline from now until 2020 and could create as many as 32,000 jobs.
But he added that ensuring a reliable electricity supply was crucial to realizing the sector’s growth ambitions as mines could only operate at 75% when there is load shedding.
“Top of the list is ensuring that the energy security of supply through long term planning, and that’s why the amount of money the president committed to reviving Eskom is so important.”
RAMAPHOSA ON ESKOM
“Eskom is too vital to our economy to be allowed to fail.” That was what President Cyril Ramaphosa said about the embattled power utility during his State of the Nation Address last week.
Eskom was set to receive further funding from the government through an urgent Special Appropriation Bill that would be tabled in Parliament. The bill was expected “to allocate a significant portion of the R230 billion fiscal support that Eskom will require over the next 10 years in the early years”.
The president said this plan was in line with the recommendations of both the Eskom Sustainability Task Team and the Technical Review Team, which were appointed by the government to assist the debt-laden power producer.
The severity of the problems at Eskom was highlighted by the president.
“The utility’s financial position remains a matter of grave concern,” he said.
In his budget speech in February, Finance Minister Tito Mboweni announced that Eskom would be allocated a R69 billion financial support package over the next three years by National Treasury to help it service its debts. However, Mboweni made sure to clarify that the package wasn’t a bailout from the government.
Ramaphosa said this committed funding ensured that Eskom had sufficient cash to meet its obligations until the end of October 2019. He said Mboweni would further elaborate on the details of the Special Appropriation Bill in due course.
“For Eskom to default on its loans will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus,” Ramaphosa said.