Electrical energy and Vitality Minister Dr Kgosientsho Ramokgopa has indicated that he intends approaching Cupboard within the coming weeks to hunt approval to increase concessional electrical energy tariffs comparable to those who have already been authorised for 2 ferrochrome producers to different electricity-intensive industries.
As well as, he advised delegates to a Metal and Engineering Industries Federation of Southern Africa (Seifsa) convention on June 11 that decrease tariffs is also made out there to much less electricity-intensive sectors resembling metal; a sector which he described as strategic and the place electrical energy prices had been flagged as one of many causes for current manufacturing closures.
Talking in opposition to a backdrop of warnings that the metals and engineering sector was at a deindustrialisation inflection level, Ramokgopa indicated that Eskom’s 62c/kWh tariff for Samancor Chrome and Glencore Merafe’s smelters had been carried out in response to the specter of imminent retrenchments, in addition to the potential lack of vital beneficiation capability.
Nonetheless, he reported that the Division of Commerce, Trade and Competitors (dtic) was compiling a listing of different industries that might grow to be eligible for tariff reductions now that Eskom had some 5 000 MW of surplus capability.
“We’re increasing this to the following set of gamers, as a result of we don’t need the message to return throughout that we’re defending the pursuits of Glencore and Samancor solely – we’re masking everybody,” he mentioned, indicating that he would take a proposal to Cupboard within the coming fortnight.
On June 8, the dtic printed a brand new Industrial Growth Technique (IDS), which additionally flagged the prospect of extending discounted electrical energy tariffs to different energy-intensive sectors.
“Preferential electrical energy tariffs for the commercial sector (together with mining, manufacturing, and energy-intensive industries like smelters) are vital for competitiveness, job creation, and industrial improvement,” the IDS states, whereas together with the implementation of concessional electrical energy tariffs for energy-intensive customers and beneficiation in an annexure titled ‘Implementation Plan for Fast Priorities’.
R2.2-TRILLION INDUSTRIALISATION OPPORTUNITY?
In the meantime, Ramokgopa additionally used the platform to insist that authorities was alive to the industrialisation alternative offered by the investments arising from each the Built-in Useful resource Plan, which outlines the technology applied sciences which can be anticipated to be launched to 2049, in addition to the Transmission Growth Plan (TDP) to 2034.
Collectively, the challenge pipeline related to each plans had been quantified to contain collective grid and technology investments of R2.2-trillion.
Seifsa president Mervyn Naidoo mentioned that deliberate coverage and procurement selections can be required if South Africa had been to leverage these investments in a way that stimulated industrialisation and job creation.
He argued that it will require a shift within the public procurement mannequin from the prevailing short-term transactional method to at least one primarily based on a “strategic” procurement framework, whereby longer-term contracts might be concluded on the again of the designation of chosen inputs and elements for native content material.
With out such a mindset, Naidoo mentioned that South Africa risked repeating the errors of earlier large-scale procurement tasks, resembling Transnet’s procurement of 1 064 locomotives, the place there had been solely restricted localisation and the place Transnet had been left with tons of of locomotives standing idle because of this.
Ramokgopa acknowledged that native business had been a casualty of previous coverage errors and mentioned that there was scope in the brand new Public Procurement Act to designate merchandise for native content material and manufacturing.
Whereas stressing that not each part or product might or must be localised, he however mentioned it was a precedence for presidency to create the long-term certainty of demand wanted by business to speculate and to make use of industrial and commerce coverage to help aggressive native manufacturing.
