SIBANYE-Stillwater CEO, Neal Froneman, issued a not-so subtle message to the South African government that its failure to provide power supply security would influence his company’s future investment decisions in the country.
Responding to a question at Sibanye-Stillwater’s annual results presentation, Froneman also said the company was reconsidering a 150MW self-generation project at its gold assets on the West Rand because the rules of engagement were foggy.
“It is positive that the minister [of minerals and energy, Gwede Mantashe] and the president [Cyril Ramaphosa] confirmed self generation would be possible, but there are still hurdles in terms of what the process is going to be,” said Froneman.
For example, there was a lack of clarity from Eskom regarding connection fees whilst the power utility had also wanted to renegotiate supply guarantees, he said. “The other thing is that the government has made it quite clear that you cannot sell back power into the grid,” said Froneman.
“So you have to make investment decisions over a 15 to 20 year time-frame – because the returns are small – so I would argue that the investment environment is still unfriendly. It’s challenging; it’s not simple; and there are many facets to this.”
Ramaphosa announced in his State of the Nation Address on February 13 that the way would be made clear for the private sector to generate power for its own use whilst it was possible now for municipalities to buy power from independent sources.
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