DEPARTMENT: PUBLIC ENTERPRISES

REPUBLIC OF SOUTH AFRICA

NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NO.: 521

DATE OF PUBLICATION: 05 March 2010

Mr P van Dalen (DA) to ask the Minister of Public Enterprises:

(1) (a) Who are Eskom's top 100 customers, (b) what (i) are their type of business, (ii) is their tariff and (iii) is their average annual consumption and (c) what was each of their average percentage use of total available electricity, for each of the past five financial years up to the latest specified date for which information is available;

(2) whether any of these companies have contracts with Eskom; if not, why not; if so, (a) what are the details of their contracts and (b) what is the (i) inception and (ii) end dates of each of their contracts;

(3) whether Eskom is reviewing any of these contracts; if not, why not; if so, what are the details including the proposed tariff;

(4) whether any of these companies have been investigated for anti-competitive behaviour and/or price fixing; if not, why not; if so, what are the relevant details;

(5) what are each of these company's contribution to the fiscus and as a percentage of the gross domestic product (GDP)?        NW635E

REPLY

(1)(a) A list of Eskom's Top 100 South African customers by consumption is attached as Annexure 1.

(b)(i) Eskom's Top 100 customers comprise mainly of industrial and mining companies.

(1)(b)(ii-iii)(c) At present it is not possible to provide the information requested on an individual basis as the information requested relates to confidential commercial information or other proprietary information of third parties and can therefore not be disclosed publicly at this stage. We are addressing this matter in order to allow for transparency whilst ensuring compliance with the legal obligations of our state-owned enterprises with due regard to the Constitutional framework that promotes the right of Access to Information and which also safeguards private or commercially sensitive information. As stated publicly before,

Government is addressing all issues of transparency on all contracts as it is cognizant of the significant interests of the public as well as that of private third parties.

The total annual consumption of Eskom's 146 Key Industrial Customers (KICs) for the period 1 April 2008 to 31 March 2009 was 83 388 GWh, or 39 % of Eskom's total sales.

KICs have made up around 40% of Eskom's total annual sales for the past few years. Save for two customers who have long term pricing contracts, all Eskom's customers in South Africa are supplied at one of the standard Eskom Retail Tariffs as approved by the National Energy Regulator of South Africa (NERSA). Most of Eskom's Top 100 customers are supplied at the NERSA approved Megaflex standard retail tariff (see Annexure 2).

(2) Yes, all these customers have supply agreements with Eskom. Generally, the standard terms and conditions of Eskom's supply agreements are applicable and the period is ongoing unless termination provisions come into being. It is not possible to provide details of specific individual contracts at this stage. As stated above, Government is addressing all issues of transparency on all contracts as it is cognisant of the significant interests of the public as well as that of private third parties.

However, it is important to note that there are special pricing arrangements that were initially concluded prior to the 1994 democratic elections (1992). At that time, the electricity regulatory, supply, and pricing landscape looked different. Eskom had excess capacity and the cost of electricity supply was much lower.

(3) Eskom is not in the process of reviewing its standard terms and conditions of supply.  The schedule of standard retail tariffs is, however amended from time to time with the approval of NERSA and subject to annual increases as determined by NERSA. Save for of two customers that are on long term pricing agreements, all KICs are on one of the NERSA approved standard retail tariffs. Eskom and BHP Billiton (one of the customers on a long term pricing agreement) have recently agreed to amend their current long-term Negotiated Pricing Agreements (NPAs) for the supply of power to BHP Billiton's Mozal smelter in Mozambique and its Hillside and Bayside smelters in South Africa, and it is envisaged that negotiations will be concluded soon. Eskom is also in the process of negotiating with Anglo American to revise its NPA (SkorpionZinc).

(4) This question should be directed to the Competition Commission.

(5) We are unable to supply detailed information on each company's contribution to the fiscus at this stage however, the general contribution of Eskom's key industrial customers to the economy, among others, includes the following:

a) Employment creation (direct and indirect through downstream and knock-on effects);

b) Export proceeds;

c) Investment (particularly in instances of robust growth);

Company tax contribution to the fiscus - i.e. national revenue; and

d) Value addition through beneficiation processes.

ANNEXURE 1 FOR PQ 521: LIST OF THE 100 KEY INDUSTRIAL CUSTOMERS

1          Afrisam (Pty) Ltd - Dudfield

2          Afrisam (Pty) Ltd - Ulco

3          Air Products SA (Pty) Ltd - Newcastle

4          Air Products SA (Pty) Ltd - Vanderbijlpark

5          Anglo Coal Ltd - Goedehoop Colliery

6          Anglo Coal Ltd - Goedehoop Colliery

7          Anglo Coal Ltd - Goedehoop Colliery

8          Anglo Coal Ltd - Goedehoop Colliery

9          Anglo Coal Ltd - Goedehoop Colliery

10        Anglo Coal Ltd - Kleinkopje

11        Anglo Coal Ltd - Kleinkopje

12        Anglo Coal Ltd - New Vaal Collieries

13        Anglo Gold Ashanti - Vaal River

14        Anglo Gold Ashanti - West Wits

15        Anglo Platinum Ltd - Amandelbult

16        Anglo Platinum Ltd - Bafokeng Rasimone

17        Anglo Platinum Ltd - Lebowa Platinum

18        Anglo Platinum Ltd - Modikwa

19        Anglo Platinum Ltd - Mototolo Concentratore Rustenburg

20        Anglo Platinum Ltd - PPRust North

21        Anglo Platinum Ltd - RPM Polokwane

22        Anglo Platinum Ltd - Rustenburg Section

23        Anglo Platinum Ltd - Union

24        Aquarius Platinum SA (Pty) Ltd - Everest

25        Aquarius Platinum SA (Pty) Ltd - Kroondal

26        Aquarius Platinum SA (Pty) Ltd - Marikana Platinum

27        ArcelorMittal Steel SA - Newcastle

28        ArcelorMittal Steel SA - Saldanha Steel

29        ArcelorMittal Steel SA - Vanderbijlpark

30        ArcelorMittal Steel SA - Vanderbijlpark

31        ASA Metals (Pty) Ltd

32        Assmang Ltd - Cato Ridge

33        Assmang Ltd - Khumani Iron Ore Mine

34        Assmang Ltd - Machadodorp

35        Barplats Mines Ltd

36        Bayside Aluminium

37        BHP Billiton Energy Coal SA - Douglas Colliery Services Ltd

38        BHP Billiton Energy Coal SA - Khutala

39        BHP Billiton Energy Coal SA - Klipspruit

40        BHP Billiton Energy Coal SA - Middelburg Mine Services Ltd

41        Black Mountain Mining Co

42        Blue Ridge Platinum Mine

43        Cape Town Iron and Steel Works (Pty) Ltd - CISCO

44        Chevron South Africa (Pty) Ltd

45        Columbus Stainless (Pty) Ltd

46        De Beers Mines Ltd - Finch

47        De Beers Mines Ltd - Kimberley

48        De Beers Mines Ltd - Venetia Mine

49        DRD Ltd - Blyvooruitzicht

50        DRD Ltd - Doornfontein

51        East Rand Proprietary Mines Ltd - Far East

52        Eastern Platinum Ltd

53        EB Steam Utility Co (Pty) Ltd - Ballantrae

54        EB Steam Utility Co (Pty) Ltd - Frame

55        EB Steam Utility Co (Pty) Ltd - Maydon

56        EB Steam Utility Co (Pty) Ltd - Prospecton

57        EB Steam Utility Co (Pty) Ltd - Sans Fibres

58        Eskom - Bosloop Pumps

59        Exxaro Base Metals (Pty) Ltd

60        Exxaro Coal (Pty) Ltd - Grootegeluk

61        Exxaro Coal (Pty) Ltd - Matla

62        Exxaro Sands (Pty) Ltd

63        Ferrometals (Pty) Ltd

64        Foskor Ltd

65        GFIMSA - Beatrix Ltd

66        GFIMSA - Driefontein Division

67        Graftech (Pty) Ltd

68        Harmony GM - Elandsrand

69        Harmony GM - Evander

70        Harmony GM - Freegold

71        Harmony GM - Randfontein Estates

72        Harmony GM - Target Operations

73        Harmony GM - Virginia

74        Hernic Ferrochrome (Pty) Ltd - Brits

75        Highveld Steel and Vanadium Ltd - Highveld

76        Highveld Steel and Vanadium Ltd - Rand Carbide

77        Hillside Aluminium

78        Impala Platinum (Pty) Ltd - Marula

79        Impala Platinum (Pty) Ltd - Refineries

80        Impala Platinum (Pty) Ltd - Rustenburg

81        International Ferro Metals SA (Pty) Ltd

82        Karee Platinum Mine

83        Kloof Gold Mining Company Limited

84        Kumba Iron Ore Ltd - Sishen

85        Lafarge Cement (Pty) Ltd - Whites

86        Mainstreet 432 - Koornfontein Mines

87        Manganese Metal Co (Pty) Ltd - Nelspruit

88        Messina Platinum Mines LTD

89        Metrorail Services - Cape

90        Metrorail Services - Johannesburg

91        Middelburg Ferrochrome (Pty) Ltd

92        Mogale Alloys (Pty) Ltd

93        Namakwa Sands Ltd - Brand-se-Baai

94        Namakwa Sands Ltd - Smelter

95        National Petroleum Refiners SA (Pty) Ltd

96        Necsa (Pty) Ltd

97        Northam Platinum Ltd

98        Optimum Colliery

99        Palabora Mining Co Ltd

100     Aurora Mining

Issued by Parliament, May 14 2010

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