The Congress of South African Trade Unions (COSATU) welcomes the National Electricity Regulator (NERSA)’s ruling providing a 35% reduction in electricity tariffs for 12 months for ferrochrome smelters.  This is a positive step towards finding a solution for these intensive electricity users whose sustainability as well as the jobs of thousands have been threatened by the increasingly unaffordable price of electricity. 

Whilst appreciating this progressive ruling and the relief it provides to Samancor Chrome and Glencore-Merafe Chrome Venture, we fear that it does not go far enough to prevent some smelters from still closing in March.  It is critical that engagements continue between Eskom, government and the ferrochrome industry, in particular Ferroglobe, Transalloys, Vanchem as well as Mozal, to find short term solutions for these critical companies, sectors and the thousands of jobs linked to them.  It is essential that these companies’ Section 189 retrenchments simultaneously be suspended for this period to allow negotiations to continue. 

COSATU applauds the efforts by the parties to find solutions and provide space for further engagements on a sustainable long-term solution for a long festering crisis that has seen many smelters close, workers retrenched and communities plunged into economic depression.  We appreciate the tireless efforts of unions in the sector, in particular the National Union of Mineworkers and the National Union of Metalworkers, as well as the Presidency, the Ministries for Electricity and Energy and Trade, Industry and Competition, Eskom and the affected companies and industries.

Key to finding a sustainable long-term solution is to provide Eskom with the necessary support to plug its many financial holes, from corruption to wasteful expenditure, from cable theft to infrastructure vandalism, and most critically to ensuring that all Eskom and municipal electricity consumers are moved to pre-paid meters.  This needs to include a comprehensive package of interventions to arrest the crisis of municipal debt owed to Eskom currently nearing R100 billion and increasing at an alarming rate of R20 billion per annum. 

Eskom cannot be sustained nor end its dependence upon unaffordable above inflation tariff hikes, unless all consumers pay for electricity consumed.  Improved daily revenue will enable Eskom and municipalities to increase the allocation of free electricity to indigent households whilst continuing to ramp up maintenance programmes and investments in new generation, transmission and distribution infrastructure.

Whilst welcoming this jobs saving agreement it is sacrosanct that all parties honour their agreed obligations, in particular the companies suspending retrenchments proceedings.  We cannot afford to see a single worker added to the already dangerously high unemployment rate of 42.4%.  We expect all parties to offer solutions and make compromises to ensure that the jobs of these workers are saved and the sustainability of this strategic industry as well as Eskom are ensured.

Key to unlocking the economy and achieving the 3% growth rate necessary to slashing unemployment, is an affordable electricity tariff regime.  Working- and middle-class families too need to see the price of electricity become affordable once again.  Lower prices will help workers take care of their families’ needs and see more money spent stimulating economic growth.  This is a matter that requires an urgent solution and prioritisation by the most senior leadership of government and industry.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)
Mobile: 082 785 0687
Email: matthew@cosatu.org.za