Cosatu has asked Nersa to impose a condition linking any relief granted to a moratorium on retrenchments. Picture: Moneyweb Members of energy regulator Nersa sounded perplexed about Eskom’s application for an interim electricity tariff applicable to Samancor and Glencore-Merafe’s smelters that is meant as a bridging mechanism to an even lower tariff to be implemented on 1 March. During a public hearing about the application on Tuesday (27 January), Eskom pleaded with the regulator to also approve an application to extend a waiver of the take-or-pay condition in its negotiated pricing agreements with the two companies, based on the hardship they are currently suffering.
Eskom asked for an extension of the waiver, which was initially approved in August for six months, so that it will be valid for another year. The application for this extension was submitted to Nersa much later than the tariff application and Eskom pleaded with regulator members to consider both applications at the same time. The applications are part of a bigger plan to rescue the struggling South African smelter industry and save hundreds of thousands of jobs, including those in the upstream and downstream value chains.
Several smelters have already issued retrenchment notices to staff. The Ferro Alloy Producers Association (Fapa) supported the Eskom application. However, Fapa chair Nellis Bester stressed that other beneficiation industries face similar hardships and have been forced to operate intermittently or not at all in the past couple of years due to being uncompetitive. The organisation requested Nersa to allow the interim tariff relief for the two companies and to also roll it out to the related manganese, silicon and vanadium smelting industries that are currently in operation.
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