Eskom's Billiton losses already R10.7bn

April 05, 2013
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Johannesburg – Eskom has already made a loss of R10.7bn through supplying electricity to Hillside, the bigger of the two aluminium smelters at BHP Billiton.

Hillside uses 1 200 MW, which makes it the third-biggest electricity user in the country. This usage is surpassed only by the cities of Cape Town and Durban, which each uses 1 300 MW.

Based on the formula agreed to determine the price at which Eskom had to supply electricity to the smelters, Hillside paid about 22.65c per kilowatt hour (kWh) for two-thirds of the 1 200 megawatts it uses, as opposed to R1.40/kWh charged to normal consumers. 

The deal was concluded in 1992.

This loss figure comes from calculations made by Sake24, Fin24’s sister publication, to determine the impact of Eskom's contracts with BHP Billiton.

It is alarming that between R8bn and R9bn of these losses were made in the past three years. There is no doubt that the numbers will continue to grow and could threaten the existence of Eskom if something is not done, according to Sake24.

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