Heads must roll

[Dave A]

I can't help think that government has got so used to been able to talk their way out of trouble that they might even believe themselves here.

South Africa's crippling power crisis will not put off investors, nor limit its ability to stage the 2010 Soccer World Cup, Public Enterprises Minister Alec Erwin said on Wednesday.

Rolling power cuts have plagued homes, businesses and the crucial mining industry in South Africa for weeks and are likely to continue for about five years, according to state power utility Eskom.

South Africa's economy has flourished for the last several years, although it still lags its emerging-market peers in the area of foreign investment and has desperately tried to lure investors since the end of apartheid in 1994.

The Soccer World Cup was seen as an ideal way of marketing the country to tourists and drawing much-needed foreign money.

Erwin said energy issues would not derail these efforts.

"We are engaging with investors ... We believe the investment process and the growth process will continue," Erwin told a joint sitting of Parliament called to debate the energy meltdown.

"And we are also absolutely certain that there is no risk to the security of electricity supply for 2010," said Erwin.
from M&G here

Meantime, back in the real world

"This was always seen as a leading developing country, the power crisis has done immense damage to that reputation," Ian Cockerill, Gold Fields chief executive officer said.

"My cellphone's melted," he told reporters when asked if overseas shareholders in Gold Fields were worried.

"They are not best pleased at all."
from IOL here

Yep! The real power of Alec Irwin's hot air is out on show.

In a surprise move, South African electricity utility Eskom has withdrawn its authorisation for the mining industry to increase its electricity use from 80% to 90% on Thursday.

News of the decision came from Gold Fields, the world's fourth-largest gold producer, which informed the media in a statement.

"Gold Fields is disappointed to confirm that Eskom has informed the company that authorisation to increase electricity load from 80% to 90% by this evening, has been temporarily withdrawn in order to 'protect further frequency decay and system instability'," the gold producer said.

"To comply with this instruction, and in the interest of safety, production at Gold Fields' operations is being pulled back to the 80% power level," it said.

Gold Fields, which reported its December quarter results earlier on Thursday, has already warned that it may be forced to close shafts and trim capital expenditure in light of the current power crisis.

The government and Eskom asked its biggest customers reduce consumption by 10% in an attempt to stabilise the country's power supply situation, but the surprise announcement means that the mining industry will still have to function at 20% less power than it normally does.

Gold Fields has already warned that a 10% cut in its power needs would translate into a 20% fall in production.

It predicted that its production in the March quarter could be between 20% and 25% lower than the December quarter should it only receive 90% of its normal usage.

The gold producer reported a 3% decline in attributable gold production to 960 000oz for the quarter.

As a result of the country's power crisis, Gold Fields has also decided not to pay an interim dividend.

Shares in Gold Fields were 65 cents lower at R110,10 on the JSE shortly before 4pm.
full story from M&G here

And in case you think it's just mining, look at the downstream effects here

Anglo Platinum, the world's top producer of the metal used to make jewellery and clean car exhausts, said it was still mining at full capacity, also on the 80 percent power supply, but was not processing the metal. The company hoped more electricity would be available next week for that to take place.
from IOL here

Alec, you're making a damn fool of yourself. If Eskom thought they could spirit more power out of hot air, they would have hooked up the entire cabinet by now.

[duncan drennan]

Alec, you're making a damn fool of yourself. If Eskom thought they could spirit more power out of hot air, they would have hooked up the entire cabinet by now.

Hehehe Did anyone catch the last few minutes of e-News last night? They did a little skiet piece of Alec Erwin over the years denying that we have an energy crisis, and then ended off with his recent statement that we have an energy crisis. As the anchor said, "I'm sure Alec Erwin does not like it that we are always watching." (ending with a large smile)

[Chatmaster]

I am seriously wondering how many people will be willing to join in legal action against Eskom. That is if it is at all possible to do so.

But lets look at the facts we are supplied with by the press.

• They have lied to us
• They continue to lie to us
• They have paid themselves huge bonuses last one is said to be 57Mil. These were as I understand performance bonuses and probably based on increased profits. These profits were clearly reached by cutting more than 50% of their staff, reducing the purchase of coal and therefore less expenses by feeding of their surpluses, and by increasing exports.

All of the above seems to be factual and if the latest article by fin24 is true, they increased their exports and decreased their import of electricity as well. Now on paper it must look very impressive as far as the profits are concerned for the company, but the damage done by their clear stupidity is much bigger than their profits on paper.

So my question is this. Just how much support will there be for taking the step to take these idiots to court. If something like that happens, should it be a criminal or civil case? Maybe one of our well learned attorneys here can be helpful in this.

IMO, there is a strong possibility to get them criminally. Based on the facts of the past few weeks, can it be seen as committing fraud, to clearly mislead government on the true reasons for not being able to supply electricity and bring the country to its knees? The motivation is clearly to be able to acquire bonuses in their millions by smartly taking the necessary expenses that makes the company successful and lowering their staff expenses by more than 50%.

By continuing what they have done until now by importing less (Decrease expenses), and exporting more (increased profits) they are clearly guilty of sabotage.

I am pretty sure that if a prosecutor has to sit and look at this scenario for just a few minutes, it will be possible to get at least a dozen criminal charges against them.

Is it realistic to say that this can be possible. Can Eskom even be taken to the courts for this?

[Dave A]

It looks like Jacob Maroga agrees with you, Chatmaster.

"The unavoidable load shedding of January left South Africans with a sense of anger and frustration, which was completely justified," said Maroga in a statement issued after the press briefing. "It is a time for leadership and accountability.
from M&G article here

Oops! Maybe I misunderstood that. Perhaps the accountability only starts now

Anyway, more on Eskom's plan moving forward from the same article:

The power situation has eased somewhat over the past few days and there has been no load-shedding since February 4, Eskom CEO Jacob Maroga told reporters on Thursday in Sunninghill, near Johannesburg.

Maroga was announcing measures to be taken by Eskom to resolve the country's electricity crisis, following the announcement of the government's national recovery plan to tackle the emergency.

"Although the solution to this problem does not lie with Eskom alone -- in fact, Eskom cannot build new power stations fast enough to meet South Africa's demand -- it is our duty to deliver to South Africans a plan that is workable and achievable; a plan that demonstrates Eskom's commitment to providing security of supply, in partnership, with all our stakeholders; a plan that can form the basis of a national rallying cry or a movement in which each and every one of us plays a crucial role, for the sake of our nation's future."

Eskom's mandate is to re-establish its ability to provide a secure power supply. A plan to achieve this has already started and will run until 2012, when Eskom's first base-load power station will come on line.

The plan has three phases: stabilisation (until the end of February), to restore 4 000MW to the system; power rationing (March to July); and power conservation and supply-side options (August 2008 to 2012).

Oh yes - Maroga also said mines are "voluntarily" reducing power by 10% for the next three years.

I suppose we're volunteering for power rationing too, then.

[duncan drennan]

I suppose we're volunteering for power rationing too, then.

Maybe just to spin this positively....I volunteer to be a part of the rationing (along with the mines), because I believe that it is in my best interests (looking out for numero uno). As long as the economy is growing it is a heck of a lot easier to make money (or keep your job if you are employed).

Seems like a reasonable thing to put your hand up for.

[Dave A]

Duncan, we're between a rock and a hard place. Given the choice between using less power and no power, I'm sure we're all "volunteering" for less power.

For the mines it's a similar choice. And as far as I can tell, this is nothing to do with using less energy. That open cast mine that had the electrical overhead power feed to boost the trucks out of the pit is now just going diesel for the full haul. No energy efficiency saving and more cost.

[wynn]

Well, you see, the reason is, because, why?
If I am the Prez and I want to make a lot (I mean a lot) of money all I have to do is, at the beginning of my ten year tenure, slowly form a "Power Station building company".
Then I create over ten years a shortage of electricity.
I then offer to build these power stations for you and you all cheer me on.
Its called marketing guys! wake up and smell the coal fumes!

[Dave A]

The rule of supply and demand?

You're a real conspiracy theorist, Wynn.

[twinscythe12332]

a killing no doubt is being made. if this was just a way to get us to buy generators, UPS's and the like, I'd say it is working quite well =P. It is amazing how we are being conditioned to this. I guess it's either adapt and survive or cross my arms and ignore it. adapt sounds like a good one to me.

[Dave A]

Some of our citizens are starting to "voice" their displeasure in true South African fashion.

An entire community just outside Pretoria has gone on the rampage to protest load shedding.

Hundreds of Ekangala and Bronkhorstspruit residents have taken to the streets for the past three days, stoning cars and buses and burning council buildings, because of what they described as Eskom's "blatant disregard for life".

On Friday Kungwini Local Municipality's emergency services control room was evacuated following reports that marauding groups were preparing to burn down more council buildings.

According to paramedics and firefighters who took shelter at the Ekangala police station, clinics in the area were also on high alert.

An irate businesswoman, Beauty Mtsweni, said she was sick of the daily power cuts.

"Everyday we have power cuts between 4am and 11pm, and this has been going on for the past three weeks. We can't cook or keep our food fresh," she said.

Mtsweni said it was clear Eskom didn't care about their welfare, and all it was interested in was increasing the price of the electricity it could not provide.

She said residents had called for meetings, but Eskom officials never pitched up.

Mtsweni said businesses were being forced to close because of the blackouts.

"If it is the only way to get Eskom and the council to listen to us, we will continue with this violence."

Ekangala police station spokesperson Constable Sally Skosana confirmed that two council buildings had been burnt as well as several others belonging to the provincial traffic department.

Vehicles belonging to the department had also been stoned and badly damaged.
full story from IOL here

[murdock]

what a load of twak...now if you dont save 10 % electricity you are the bad person...wait till winter the demand is going to go up and up never mind saving 10 % you are going to be using 20 % more because of all the heated blankets...heaters...hot baths...etc...etc we are in for a long cold winter...unless you have invested in lots of wood for the fire place...a gas heater and dont forget to stock up on gas...the bottom line is between goverment and eskom they f****up and now they are trying to turn it around and make the man on the street the bad person because he doesnt save 10 %...i just think this whole thing is a joke.

[Dave A]

A question to ask at the moment is how much is the Richards Bay aluminium smelter worth to the South African economy? And compare that to what load shedding is costing our economy.

I didn't know this, but apparently the aluminium oxide ore is being imported from Australia, smelted into aluminium ingots here, then exported again. Other than paying the bills incurred locally, there's no money flow through SA.

Now if the smelter is shut down - no load shedding is required.

I also heard that the current round of load-shedding is, once again, mainly due to coal supply problems.

[murdock]

better still why dont they build a power station specifically for alusaf and send them the bill and charge them 50 % higher rates then we can all carry on as things were before...and in the next 5 years worry about the lack of power again because the chimps still wont spend the money were it is needed...this way it doesnt come out of their budget for expensive cars and parties.