President Cyril Ramaphosa acknowledged South Africa would need significant assistance from the private sector through independent power generation and rail concession arrangements to improve the country’s dire economic prospects.
Ramaphosa delivered his address to the Investing in African Mining Indaba in Cape Town on Tuesday morning.
His remarks come during severe constraints to Transnet’s rail and export capacity, an ongoing energy crisis at Eskom, and a 9% drop in mining production year-on-year.
So dire are Transnet’s challenges that 2022 coal exports through the Richards Bay Coal Terminal dropped to about 50-million tonnes, the worst performance for coal exports at the terminal since 1993.
Ramaphosa’s address comes ahead of expected changes in strategic leadership positions in the state and its entities as Eskom Group CEO Andre de Ruyter leaves the entity at the end of March and the president is expected to announce a reshuffle of his Cabinet.
The president said government has introduced measures to improve the security of energy supply, accelerate economic reforms, tackle illegal mining and damage to infrastructure and improve the regulatory environment in mining and energy.
“This is our government demonstrating it is open to working with the private sector so we achieve great results. We know there is great strength in working with the private sector. Sometimes government prefers to do things on their own, but faced with this kind of crisis, we have seen it is best to work with those who have a common interest with us.”
Ramaphosa urged the private sector to be forthcoming with proposals and involvement in energy production.
The president urged the private sector not to complain about the country’s challenges as the door was open for them to offer solutions.
He said government has signed agreements for 25 projects representing 2,800MW of new capacity, and construction would start soon.
“We are facilitating investment in new generation capacity by private producers by, among other things, removing the licensing threshold for embedded generation projects. Eskom is looking to purchase surplus power from companies with available generation capacity.”
Ramaphosa praised the mining sector for moving towards generating its own electricity since the licensing threshold was lifted, allowing for the development of 89 embedded power generation projects in solar, wind, and battery storage.
He said after infrastructure inefficiencies triggered a 15% decline in mineral sales, the Minerals Council of South Africa and Transnet partnership announced last year to stabilise the performance of rail lines and ports was vital.
“A new policy framework for rail sets out actions to modernise the rail network, enable private investment, improve regulations and restore rail as a competitive mode of freight and commuter transport. Similar efforts are under way to enable private investment in our ports and certain container corridors.”
Introducing Ramaphosa, minister of mineral resources and energy Gwede Mantashe buttered up the head of state with an acclamation that could not be ignored with a Cabinet reshuffle looming.
“My president, President Ramaphosa, is the president of South Africa. He has won the election as president of the ANC and president of South Africa. We are very proud of that. President, you are steering the country through everything and load-shedding. Everything that is difficult is sitting in this presidency,” said Mantashe.
Ramaphosa thanked the minister for the warm introduction and acknowledged Mantashe as “minister and newly elected ANC chair” to laughter from the crowd.
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