A bigger looming problem is where Eskom is going to find another R7 billion for diesel for the rest of the year. It was provided with ‘fiscal support’ (read: a bailout) of R21.9 billion in Finance Minister Enoch Godongwana’s February budget.

By July, Eskom’s debt owed by municipalities stood at R49.1 billion – an R8.2 billion increase since September 2021. The total amount was ‘only’ R9.5 billion in 2017.

Shoddy maintenance = unavailability
Oberholzer also admitted on Monday that the work done by Eskom and its contractors’ maintenance team is simply not up to standard. He said that units will often break down shortly after undergoing maintenance. This is due to a “lack of skills” both internally and at contractors. One might describe this skills crisis at the utility as ‘acute’.

The coal fleet has not been able to generate more than 19 500MW sustainably since Friday morning, and last achieved over 21 000MW on Thursday morning.

Eoin Treacy's view

Electricity availability is becoming a factor in a host of locations. In some areas its because of less snowmelt. In others its because of a reluctance to build new sources of supply. In South Africa, it is unfortunately a story of corruption forced ineptitude.

South Africa is a special case because of the number of mines that rely on electricity from Eskom. The last time there were widespread outages, platinum prices exploded on the upside. Since then the mines have invested in generators. The challenge today is sourcing sufficient quantities of diesel at attractive prices.

Russia is a major exporter which is cut off from many buyers. Meanwhile shipping companies are now also in the market for the fuel following the introduction of the IMO2020 emissions rules.

Platinum is bucking the trend in gold and recouped yesterday’s loss today. Nevertheless, the price will need to sustain a move above $1000 to confirm a return to demand dominance.