/ 24 January 2023

Attacks on Mantashe are by people in renewable energy lobby

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Mineral Resources and Energy Minister Gwede Mantashe. Photo: Felix Dlangamandla/Gallo

The minister of international relations and cooperation, Naledi Pandor, questioned why electricity plants kept breaking down and labelled that as “an oppositional act against South Africa”. This remark echoed those of minister of mineral resources and energy, Gwede Mantashe, who said the utility “is actively agitating for the overthrow of the state”

These are two declarations from cabinet ministers who are worried about the detrimental effects of stage six load-shedding on the lives and livelihoods of the people. This indicates that there is some agreement among cabinet ministers that Eskom has to be fixed immediately.

The intentions to integrate state-owned enterprises (SOEs) into line departments were supported by ANC delegates at the party’s 55th national conference held from 16 to 20 December 2022 at Nasrec in Gauteng. 

This means Eskom must be transferred to the mineral resources and energy department, Transnet and SAA to the transport department and Denel to the defence department. The ANC delegates made a critical decision that is structurally sound in terms of reforms. This decision will enhance transparency, provide certainty with clear SOE direction, and responsible departments will be held accountable. 

This also enables decision-making and execution more quickly and eliminates needless bureaucracy involving numerous often misaligned departments. The confusion brought on by frequently conflicting messages from the mineral resources and energy department and the public enterprises department will be eliminated and provide certainty to citizens and investors. This decision establishes a clear “one-stop shop” and “one messaging” for issues relating to energy.

Mantashe has committed to ending load-shedding in less than “six to 12 months”, which was supported by the minister of finance, Enoch Godongwana. This makes the ongoing attacks on Mantashe odd and suspicious. A closer examination of state-owned enterprises operating under the department overseen by Mantashe reveals obvious signs of a turnaround. 

Each of the 12 state-owned enterprises has improved and stabilised under his leadership. In the previous fiscal year, the mineral resources and energy department received six unqualified audits without findings and five unqualified audits. This indicates that out of 12 state-owned enterprises, 11 had unqualified audit results with six getting clean audits, which is a significant improvement. 

A closer examination of the recent acquisition strategy by the Central Energy Fund (CEF) — an entity under the mineral resources and energy department — shows that they have a strong professional team and a sound financial position. This is demonstrated by the strategic acquisition of a 50% stake in BP Southern Africa’s Cape Town Terminal, which has a storage capacity of about 86 million litres of diesel, gasoline, jet fuel and illuminating paraffin. 

The CEF acquired a 60% stake in Avedia Energy, which owns the liquified petroleum gas (LPG) terminal in Saldanha. The CEF completed the acquisition of a 30% stake in the Republic of Mozambique Pipeline Company, increasing their equity from 25% to 40%. 

This can be extended to the Council for Geosciences, which has published more than 90% of geological data online for free to drive exploration activity in the country from 1% to 5% of global exploration spent. The council is piloting technologies such as carbon capture use and storage in Mpumalanga.

It must be noted that these attacks are not directed at indefinite load-shedding stage six, or any other failing state-owned enterprise under the public enterprises department. This leads me to believe that load-shedding may have been created in an effort to spark an energy crisis, enrage the populace, and sell Eskom for R51 similar to the sale of SAA. 

The justification for the SAA sale is still unclear and subject to a lawsuit. The explanation provided is that privatisation of state-owned enterprises is an essential reform for the nation’s economy, according to the public enterprises minister, Pravin Gordhan, as quoted by Bloomberg. Therefore, there is a clear indication that Eskom, Denel and Transnet already have buyers who will not pay more than R51.

These attacks on Mantashe must be characterised as narrow, driven by greed and personal. These attacks are about renewable energy, restructuring and unbundling of Eskom for privatisation and liberalisation of energy markets (for example, plans for a power exchange). 

These people seem to know that Mantashe will be able to fix load-shedding in the short term. Meaning their plans to run Eskom down, unbundle, privatise and sell at R51 will not happen under the department led by Mantashe. This also means the free rein of the renewables lobby and their funders is over.

A pragmatic balanced energy mix guided by the Integrated Resource Plan (IRP2019) which includes coal, nuclear and gas, will be prioritised. The minister has been called a dinosaur and many names. 

These attacks must be seen as the last kick of a dying horse — the exclusive milking of Eskom by unsustainable renewable energy will come to an end, and a thorough audit or assessment must be carried out to compare the performance of renewable energy to planned performance and contractual capacity. 

We should have enough information to finish this endeavour. In the meantime, the minerals and energy department must never be intimidated by the renewable energy lobby groups, and must never become a ministry of renewables. If they give in, we will never recover from permanent poverty, unemployment and inequality.

The ANC delegates were correct to concur that it is impossible to deny the existence of climate change. But they emphasised that the energy transition should be handled carefully to avoid undermining development and having a detrimental effect on people’s lives and means of subsistence. 

South Africa also has extensive uranium and coal mineral resources for nuclear and coal power generation. Therefore, concentrating on gas, nuclear and coal could have a significant effect on employment and economic growth, which could help reduce poverty, unemployment and inequality.

As a sovereign nation, South Africa is entitled to select its energy sources. Energy policy cannot be left up to NGOs and a select group of individuals with financial stakes in renewable energy. 

National interests have a role in the energy debate. Energy is still the centre of development; it is also about national security and independence. A country’s access to energy determines its fate.

A balanced energy mix ought to take precedence, guided by IRP2019. This means South Africa should be permitted to pursue exploration, development and exploitation of its natural gas both offshore (in the Orange Basin) and onshore (in the Karoo Basin) without being intimidated by foreign-funded NGOs. 

Siyanda Mngadi is a director at Ntuthuko Resources, Energy, Mining and Exploration. He writes in his personal capacity.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.