FILE PHOTO: South Africa's Mineral Resources and Energy Minister Gwede Mantashe looks on during a news conference in Pretoria
FILE PHOTO: South Africa's Mineral Resources and Energy Minister Gwede Mantashe looks on during a news conference in Pretoria

Government engages with coal producers to cap electricity price

By Dineo Faku Time of article published Jan 31, 2020

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JOHANNESBURG - Department of Mineral and Energy Affairs Minister Gwede Mantashe is expected to pronounce on the outcome of talks between the government and coal producers to cap the price of electricity later this month.

Speaking on the sidelines of the 15th Annual Southern African Coal Conference, Thabo Mokoena, the Department of Mineral Resources and Energy’s (DMRE) director-general, said yesterday that the department was optimistic about the engagements.

“The minister will be able to give the outcome of the meetings with the industry by February 15 on how industry and the government will work together around the prices of coal,” said Mokoena.

Last year Mantashe announced that the government would hold talks with coal producers and independent coal producers to find common ground on prices to address inflationary increases, as the economy buckled under power utility Eskom’s supply challenges.

A task team had been appointed to ensure that DMRE, coal producers and renewable energy producers reached common ground on prices.

Eskom said at its 2018 financial year-end results presentation in August last year that its coal procurement costs had increased by almost 20percent year-on-year.   

In light of this, Mantashe last year said that the government wanted to use administered prices as an interventionist tool to grow the economy and support localisation, including steps to address administered prices, in electricity, port and rail tariffs, which were hampering investment and growth in the country.

Mokoena said yesterday that the government was addressing constraints to mining.

The turnaround times to process licence applications had been under review, with the aim of reducing time frames, by adopting more effective and efficient internal processes.

Mokoena said that the department had implemented steps to address the turn-around time in issuing water use licences and had also cut down the time it took to apply for mining permits.

“We have improved our turn-around time in processing licences. For mining right licences it can take forever. However, we have told people that they do not need to wait for five years for a permit have applied for a prospective right.   

"Our business aims to ensure applications are processed timeously,” he said.

The department had made strides in processing the backlog in licence applications in the Mpumalanga, Limpopo and North West regions, he said. These offices were reopened.

In September 2018, the department reopened the Limpopo office after a two-month shut down. The department reopened its Mpumalanga regional office almost a year after its closure, following allegations of corruption and backlogs in the issuing of licences.


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