http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.22Change: -0.23
R/$ = 11.16Change: -0.09
Au 1240.10 $/ozChange: -4.17
Pt 1243.50 $/ozChange: -18.70
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 02, 2011

02/09/2011 (On-The-Air)

Back
safmpod_02092011
Construction|Engineering|Africa|CoAL|Energy Intensive Users Group|Engineering News|Environment|Eskom|Flow|Industrial|Mining Weekly|Projects|Renewable Energy|Renewable-Energy|Resources|Africa|South Africa|Energy|Equipment|Flow|Mining|Martin Creamer|Power|Terence Creamer|Engineering News|Mining Weekly
Construction|Engineering|Africa|CoAL|Environment|Eskom|Flow|Industrial|Projects|Renewable Energy|Renewable-Energy|Resources|Africa||Energy|Equipment|Flow|Mining|Power||
construction|engineering|africa-company|coal|energy-intensive-users-group|engineering-news|environment|eskom|flow-company|industrial|mining-weekly-company|projects|renewable-energy|renewable-energy-company|resources|africa|south-africa|energy|equipment|flow-industry-term|mining|martin-creamer|power|terence-creamer|engineering-news-published-medium|mining-weekly
© Reuse this



It’s that time again on a Friday when AMLive presents another Update From The Coal-Face with Terence Creamer, editor of Engineering News and a contributing editor at Mining Weekly.

De Gouveia: Power-intensive companies in South Africa are beginning to openly express concern about the current tariff trajectory, which they claim could undermine existing investments and forestall yet others.

Creamer: The Energy Intensive Users Group, with includes South Africa’s largest mining and industrial business in South Africa, has done some work on what it calls South Africa’s power price path.

  • From this, they conclude that the country is approaching an electricity price ‘tipping point’ and that unless coordinated policy, regulatory and investment actions are taken to moderate the rate of increase, the prospects for energy-intensive business activity in South Africa will become increasingly bleak.
  • In addition, the increases could well undermine the current aspiration to add more value to South African-produced minerals ahead of export, which is one of the objectives of the New Growth Path.
  • They point out that average real prices have already more or less doubled since the crisis of 2008 from 25c/kWh to 50c/kWh.
  • They also calculate that if Eskom were to again raise tariffs at the rate of 25% a year, which have been approved form the period 2010 to 2013, in 2014 and 2015, the price could breach the 100 c/kWh level in the coming decade.
  • This level, they says is not sustainable and will lead to the closure of smelters and furnaces. They argue that the price should not rise above 80c/kWh.
  • The main target of the lobbying effort is arguably Nersa and the next tariff round, which is likely to be submitted for consideration by Eskom early next year for implementation on April 1, 2013.
  • Eskom says it will apply its mind not only to the need for healthy financial ratios, but the effect of rising prices on demand and the economy as a whole.
  • Nersa has said its methodology is flexible enough to cater form changed circumstances, noting that the 3x25% increases were set against the backdrop of Eskom’s financial challenges precipitated by prices that stayed too low for too long.
  • The EIUG says a balance must be struck between sustaining Eskom’s credit rating and ensuring power price affordability.

De Gouveia: Power prices aside, there have been some developments on the beneficiation policy front this week.

Creamer: Yes, the issue of adding value to South Africa’s minerals ahead of export has been knocking around for years if not decades.

  • But steadily it issue is coming to the fore as a strategic economic imperative that is supported by policy and probably future legislation.
  • The policy support comes from the New Growth Path and the Industrial Policy Action Plan. And, the development this week relates to the nature of the possible legislative support.
  • This could come from amendments to the Mineral and Petroleum Resources Development Act, or MPRDA.We don’t have full details yet, but Cabinet has already approved the minerals beneficiation framework and there will now be a process of consultation with stakeholders to firm up on this framework by November.
  • Special adviser to the Minister and former DG, Sandile Nogxina told Australian investors in Perth this week that the framework would outline the manner in which an orderly development of the country’s mineral value chains will occur.
  • He also emphasised that it would encourage the labour-absorptive industries rather than simply the capital-intensive beneficiation practices of the past.
  • An amendment to the MPRDA will seek to align the Act with the beneficiation strategy, including possibly creating stipulations to ensure that there is sufficient feedstock available for such activity.
  • But as you heard earlier, the policy and the legislative environment will only take us so far. We will also need a conducive power price environment, new skills, higher investor confidence and possibly a more competitive exchange rate to really upscale mineral beneficiation.

De Gouveia: There have also been new developments on the renewable energy front since we spoke last week.

Creamer: Last week, I told you that developers were going through tender documentation related to the first 3 725 MW of renewable energy capacity that the Department of Energy wants delivered into the grid between 2012 and 2016.

  • This will involve an investment of between $10-billion and $12-billion, into onshore wind, solar photovoltaic, solar concentrating power, biomass, biogas, landfill gas, small hydro and other smaller projects of less 5 MW.
  • And some of this investment will flow in the form of much needed foreign direct investment.
  • Well, this week, the Department of Energy reported that more than 400 companies had paid the R15 000 fee to receive the bidding documentation, which has been made available since August 3.
  • Of those, it estimates that some 270 are potential Independent Power Producer bidders, with the balance being financiers and equipment suppliers.
  • This has given government hope that the tender will be fully subscribed at the time of final submissions, which has been set for November 4.
  • Preferred bidders will then be selected and will have to enter into negotiations with Eskom for a power purchase agreement and grid connectivity.
  • But they will also need to meet a range of economic development stipulations relating to such things job creation, local content and community upliftment.
  • A financial closure deadline has also been set for the middle of next year and actual construction should follow thereafter.

De Gouveia: Terence Creamer is editor of Engineering News and a contributing editor at Mining Weekly. Martin Creamer will be back At The Coal-Face at the same time next Friday.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other SAFM
More
 
 
Latest News
Swedish Ambassador to South Africa Christian Meuwly will next week inaugurate the final roll-out of the new vertical shaft brick kiln (VSBK) at clay brick manufacturer Langkloof Bricks’ facility in Jeffrey’s Bay. The VSBK formed a part of economic, social and...
Hot on the heels of the launch of Rustenburg’s rapid transport system’s brand name and logo last week, a negotiation framework agreement (NFA) has been formally agreed to and signed by the Rustenburg Local Municipality (RLM) and taxi and bus operators affected by the...
The runway at the George Airport, in the Western Cape, has been rehabilitated to improve safety, in terms of run-off and storm water drainage, and the structural capacity of the pavement surface. The scope of work comprised the extension of Runway 11/29, the...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
Integrated energy and chemical company Sasol has partnered with Unisa Graduate School of Business Leadership (SBL) professor and founder and CEO of PanAvest Partnership Dr Douglas Boateng to publish a series of books on executive supply chain management aimed at...
MORNÉ DU PLESSIS Increased urgency and burgeoning awareness of the importance of these issues are beginning to change political risks and, thus, State responses to environmental concerns
The World Wide Fund for Nature’s (WWF’s) 2014 Living Planet Index (LPI) indicates that there has been a 52% decline in vertebrate species since 1970. The Index tracked the trends of 10 000 discrete populations of over 3000 vertebrate species between 1970 and 2010.
Rwanda has joined a number of East African countries seeking to import electricity from Ethiopia as its demand grows. After it became apparent several generation project it is implementing will not come on stream early enough, now plans to import 400 MW from Ethiopia...
Metrorail’s first new passenger train will arrive in November next year, says Passenger Rail Agency of South Africa (PRASA) CEO Lucky Montana. “Next year we will be able to put our hands around the infrastructure and equipment we have been talking about for so long.”
The Competition Commission has launched an investigation into what it says are “price fixing, market division and collusive tendering in the market for the manufacture and supply of automotive components to original equipment manufacturers” (OEMs, or vehicle...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks