Jul 18, 2008
Daily podcast – July 18, 2008Back
Johannesburg|Africa|Aim Resources|CoAL|Diesel|Eskom|Flow|Potash Corp|PROJECT|Projects|Resources|Road|Africa|Burkina Faso|South Africa|Zimbabwe|ZAR|Mine Development|Perkoa Zinc Mine|Energy|Flow|Logistics|Mining|Steel|Bongani Nqwababa|Jacob Maroga|Mercedes Benz|Power|Diesel
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From Creamer Media in Johannesburg, I'm Fatima Gabru.
Making headlines today:
State-owned power utility Eskom has provided fresh insight into its much-anticipated funding plan for a 343-billion rand, five-year capital expenditure programme, which is viewed as essential if South Africa is to add some 19 000 mega watts of much needed generation capacity by 2017 and restore a reserve margin of 15%. The margin is currently standing at a paltry 8%.
The utility will go on an international road show next week to map out how it plans to close a 150-billion rand funding gap through borrowings on the South African and international capital markets, with CEO Jacob Maroga expecting clarity on the promised 60-billion rand shareholder injection from National Treasury ahead of that tour.
Finance director Bongani Nqwababa says he is unable to provide details on the precise nature of the injection, which many of the credit rating agencies have indicated will be crucial to stabilising Eskom's rating, but he confirms that the transfer will be ‘front-loaded'. In other words, the bulk of the injection would flow in the first few years, as opposed to the initial plan, which would have seen National Treasury injecting the bulk of the money in the last two years of a five-year rolling injection.
This trend is also unlikely to be reversed in the current financial year, with Eskom expecting to burn between 135- and 140-million tons of coal during 2008/2009.
Much of the additional coal is also being sourced outside of the confines of the State-owned group's favourable long-term contracts with tied collieries, dramatically increasing the direct cost of primary energy and its associated logistics, and placing strain on its financial ratios.
Eskom CEO Jacob Maroga:
Aim Resources attributed its funding woes to the current zinc prices and forecasts, which made it difficult for zinc projects to secure funding, as well as a downturn in both debt and equity markets.
The company said on Thursday that spot zinc prices had fallen "well below" the level required to provide an adequate return, and below the predicted cash break-even point.
Raids on steel companies may have unearthed cartel
In political news:
EU to widen Zimbabwe sanctions say diplomats
Edited by: Shannon de Ryhove© Reuse this Comment Guidelines (150 word limit)
Other Intellectual Property Law News
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Recent Research Reports
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.
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Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
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