[Bhpbilliton] Sake24 takes Eskom to court

[Andy Whitmore]

Sake24 takes Eskom to court

By Sapa, http://www.timeslive.co.za/business/article362057.ece

18 March 2010

Sake24 has lodged a high court application to force electricity utility 
Eskom to reveal the tariffs it charges BHP Billiton, one of the world's 
largest mining companies, Beeld reports.

Sake24 wants to know how much its aluminium operations in Richard's Bay 
and Mozambique pay for electricity.

This comes after an investigation by Sake24 journalist Jan de Lange 
which showed that these operations used as much power as cities such as 
Durban and Cape Town.

Beeld said the tariffs BHP Billiton paid were lower than what it cost 
Eskom to generate the electricity.

Eskom has declined to reveal how much BHP Billiton pays.

Sake24 wants a court order to force Eskom and BHP Billiton to make the 
information public.

South African consumers, already suffering after the global recession, 
are facing a 25 percent hike in electricity prices every year for the 
next three years.

--------------------

Hogan doesn't give Eskom deal details

By Sapa - http://www.timeslive.co.za/business/article364812.ece

19 March 2010

Public Enterprises Minister Barbara Hogan on Friday refused to reveal 
details of Eskom's long-running contracts with foreign companies like 
BHP Billiton that contributed to the entity's R9.5 billion loss last year.

Hogan told Parliament's portfolio committee on public enterprises she 
could not bow to pressure to do so because some of the companies were in 
competition with each other and indiscretion would make Eskom look "silly".

"There are mines that are in that world that are in competition with 
each other. There are Eskom customers that are competitors.

Now we can say let's make this all open to everybody, which will make us 
look pretty silly," she told MPs.

Eskom is under intense media pressure to reveal details of its 25-year 
contract with mining giant BHP Billiton.

Sake24 this week asked for a court order forcing Eskom to reveal the 
price at which it supplies electricity to BHP Billiton's two aluminium 
smelters in South Africa.

They reportedly consume more than 5.6 percent of Eskom's electricity 
output at discounted prices because of a clause in the contract linking 
the tariff to the aluminium price, which nosedived during the global 
economic crisis.

Sake24 claims that if Eskom were to break the contract, South Africa's 
energy crisis would be at an end. However if it continued as is, it 
would run into more trouble as its exposure to demand linked to 
aluminium prices is set to increase dramatically.

The troubled national electricity supplier has refused to make public 
the details of the deal on the grounds that it would be detrimental to 
BHP Billiton's commercial and financial interests.

Hogan said her department was intent on renegotiating contracts 
concluded by Eskom during the apartheid-era to attract investment into 
South Africa which have since become burdensome to the company because 
of the preferential pricing clauses.

"The matter is being pursued actively at the moment. In the days of free 
electricity we could afford such expenditure. Nowadays that is 
problematic," she said.

Hogan said reports that Eskom was stuck with 138 such deals were baseless.

"Let me make very clear that there is not a notion here that Eskom is 
engaged in a myriad of confidential secretive agreements that are not 
regulated. "

There were a "small number" of such deals and their terms were not being 
hidden from government, Hogan said, adding that she had been briefed on 
them by acting Eskom CEO Paul Makwana.

"I have received a confidential briefing from him on those matters so I 
do have sight of what these matters are about. We too are equally 
concerned."

She was responding to a question from MPs on whether the state had any 
say in major contracts concluded by Eskom.

The preferential pricing contracts are seen as part of the reason not 
only for Eskom's losses but for annual 25 percent tariff increases that 
will be imposed on South Africans to make up the shortfall in funding 
for its infrastructure expansion programme.

Acting director general of public enterprises Sandra Coetzee confirmed 
that before concluding significant contracts, state-owned enterprises 
had to seek the approval of the department.

-- 

Andy Whitmore (Whit)
Indigenous Peoples Links (PIPLinks)
Communications and Research
Finspace, 225-229 Seven Sisters Road, London, N4 2DA
Ph / fax: + 44 (0)207 263 1002
Email: comms at piplinks.org  Web: http://www.piplinks.org

"Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it." - Mark Twain