The Africa Channel plans to make Nigerian films available in the US, Canada and the Caribbean in early 2022, Brendan Gabriel, the channel’s ... vice president of production and creative director, tells The Africa Report.
[This is the fifth in our series on what to watch in 2020. Click on the links to catch up with our first on Africa’s 2020 elections, the second on higher shipping costs, the third on how demographics is leaving Africa short of capital and the fourth on how the shine is coming off diamonds for De Beers]
Eskom’s outages are the “death knell” for fourth-quarter South African GDP growth, and threaten to push the country into a recession by 2020, Indigo Ellis, head of Africa research at Verisk Maplecroft in London, says in a December research note.
- “Miners are struggling to keep up with production forecasts as rolling blackouts test their mitigation plans and imperil underground operations,” she says.
- Load-shedding in the first quarter of 2019 caused platinum miner Amplats to lose 12% of its refined production, at unknown cost, Ellis says.
- Implats in December was forced to stop platinum production at its Rustenburg and Marula mines after load-shedding cut their power supply to 20%-30%. The firm said it was using electricity for essential maintenance only.
- The cost to Implats for each day of stoppage this month has been estimated at US$8 million.
Contingency plans by miners, which including shifting from non-essential to core mining activities, will only mitigate production stoppages for so long, Ellis says. The cost of running back-up diesel generators, as well as safety mitigation options, are squeezing profits.
That will hold back long-term investment as well ruining short-term production plans. “There are few mining companies willing to commit to the kind of capex that will stimulate much-needed economic growth,” Ellis says.
South Africa’s Minerals Council warned in December that the “desperate” situation calls for urgent action by mines and energy minister Gwede Mantashe to enable self-generation facilities and independent power producers. “Eskom is essentially making an industrial policy decision to downscale the mining sector,” Minerals Council CEO Roger Baxter said.
Coal still accounts for 90% of South Africa’s electricity mix, according to the International Energy Agency (IEA) in Paris. Mantashe is known as ‘King Coal’ because of his coal allegiance. Ellis at Verisk Maplecroft does not anticipate any real progress to be made towards diversifying the energy mix while Mantashe remains in post.
But South Africa is not taking advantage of its coal in export markets.
- The country failed to benefit in 2018 from the expanding international trade in seaborne coal due to domestic supply constraints, the IEA said in its 2019 coal analysis and forecast to 2024 published in December.
- Indonesia, rather than South Africa, met most of the increased demand from India, the IEA says.
Neither is coal reliance sustainable.
- South Africa faces the challenge of replacing the Mpumalanga coal deposit once it’s exhausted.
- The quality of alternative deposits in Waterberg and the Free State is lower, the IEA says.
- According to the IEA, “projects will be more difficult to finance due to investor constraints on financing coal.”
South Africa’s mining charter adopted in December 2018 may also deter foreign companies from investing, the IEA says. The charter stipulates that 70% of expenditure on mining goods must be spent with South African companies.
“The rand will certainly continue to take the brunt of continued load-shedding,” Ellis says. “Any short-term resolutions will merely be a sticking plaster on an issue that will continue to rear its head into 2020 and beyond.”
The Bottom Line:
South African miners urgently need access to diversified sources of power if the industry is to have a viable future.
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