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‘Coal still an important part of SA’s energy mix’

Mineral Resources and Energy Minister Gwede Mantashe and the Department of Energy yesterday told Parliament’s portfolio committee on mineral resources and energy that coal was still an important part of South Africa’s energy mix. Photo: Supplied

Mineral Resources and Energy Minister Gwede Mantashe and the Department of Energy yesterday told Parliament’s portfolio committee on mineral resources and energy that coal was still an important part of South Africa’s energy mix. Photo: Supplied

Published Aug 25, 2021

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MINERAL Resources and Energy Minister Gwede Mantashe and the Department of Energy yesterday told Parliament’s portfolio committee on mineral resources and energy that coal was still an important part of South Africa’s energy mix.

Mantashe said coal was currently one of the best-performing commodities in South African mining, and rail and ports were its obstacle.

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“Therefore, we are not going to be in the process of aborting the coal economy, because it is not desired in the future.

“We cannot say Day Zero of 2050 is coming, so we must kill coal now. We are not going to be part of that strategy. It is a dangerous strategy to the economy,” the minister said.

Coal exporters have complained that vandalism, theft and train derailment at Transnet’s export railway line have been major challenges to growth.

Mantashe said renewable energy contributed 8.3 percent to South Africa’s energy generation. However, it cost Eskom 25 percent of primary fuel, which was a mismatch.

He said the department was committed to ensuring that the state-owned power companies were living up to their mandates.

The Department of Mineral Resources and Energy owns companies including PetroSA, the National Nuclear Energy Corporation of South Africa (Necsa), and the National Energy Regulator of South Africa.

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Mantashe said the government was hard at work in putting together a new petroleum company, and PetroSA had made a turnaround in terms of its financial performance.

“This year there has been consistent payment of salaries. As we continue with the restructuring the company it will systematically continue to return to profitability.

“Members of the committee must remember that this company is an example of asset stripping. It had no chief executive (CEO) from 2014 and we only appointed a CEO in 2020,” added Mantashe.

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Meanwhile, Necsa said the group’s organisational culture was not geared towards high performance.

Loyiso Tyabashe, who took over as chief executive in January, told the committee that the group needed to ensure it achieved profitability sooner than later.

“The organisational culture needs to be geared towards high performance organisation because as we all know organisational cultures are what determine the prosperity of the organisation,”

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Tyabashe said, adding that the Necsa financial situation needed urgent intervention.

The group was changing its corporate plan and had implemented cost containment measures to reduce the losses, manage cash flow and rehabilitate the balance sheet.

“While cost containment is crucial, there is another aspect to the scale which is increasing the revenue streams going forward,” said Tyabashe.

Tyabashe said the group would today present a strategy to return the business to profitability.

Tyabashe said that the group wanted to achieve a financially secure organisation with good corporate governance.

“The key pillar is to stop the financial bleeding and turn the organisation around into an entity with sustainability,” he said.

Tyabashe said it was important that the department helped Necsa to access key nuclear markets.

“There are many goals we have scored at Necsa and we have to change and realign our strategy to meet our mandate,” said Tyabashe.

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