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Chamber of Mines opposes Eskom’s RCA applications

15th May 2018

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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JOHANNESBURG (miningweekly.com) – The Chamber of Mines (CoM) has opposed State-owned Eskom’s application to the National Energy Regulator of South Africa (Nersa) for a large tariff increase to recover losses on its Regulatory Clearing Account (RCA).

If granted, the requested R66.6-billion increase, will be passed on to consumers and will result in mine closures and have a severely negatively impact on other sectors that depend on the mining sector, the CoM said on Tuesday.

The CoM suggested that Eskom should rework its business plan to reduce its fixed and variable costs, while growing sales, which will reduce the electricity tariff.

Further, it has recommended that Nersa not pass the RCA on to customers but rather that the shareholder (government) task itself with dealing with the continuing inefficiencies at Eskom.

In addition, the CoM has also suggested that government consider the sale of a portion of its stake within Eskom, as it cannot afford to bail out Eskom.

The chamber has also recommended that Eskom reduce its spare capacity from 35% to an industry-acceptable capacity of 15%.

“This can be achieved by mothballing or putting some of the older power stations on cold storage,” the CoM said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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