Eskom backtracks on Coega smelter

FACED WITH mounting criticism over power outages Eskom has warned that South Africa cannot afford large new energyexpensive projects until at least 2013 when the first of the new power stations will come on stream. Eskom’s warning to government includes the aluminium smelter at Coega, which in operation would consume 1350 megawatts or 3.5% of Eskom’s total electricity production. That’s more power than is currently used in the entire Nelson Mandela metropolitan region, including all of Port Elizabeth. The Coega IDZ has been marketed to potential foreign investors as having available cheap electric power, even though this power doesn’t yet exist and what there is would have to be ‘piped’ in along transmission lines over long distances. Now Eskom is saying what the majority of South Africans are thinking. “You don’t sell what you don’t have,” said Eskom’s financial director Bongani Nqwababa. He told the media that projects such as the Rio Tinto/Alcan aluminium smelter at Coega and extensions to BHP Billiton’s Hillside smelter at Richards Bay should be placed on hold and South Africa should stop marketing itself both locally and internationally as an investment destination with low cost electricity until after 2013. This should be done even if it invoked penalty clauses such as those in place with Alcan at Coega. Penalties, he pointed out, would cost less than having to build a new power station for the smelter. What's your view and how have you been affected by the power cuts? Email your comments to: joyo@nowmedia.co.za