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Eskom, Billiton in talks

Durban - Eskom and BHP Billiton are discussing a review of Billiton's electricity agreements.

The contracts set the tariffs that Billiton has to pay Eskom for the electricity consumed by its two aluminium smelters - Hillside in Richards Bay and Mozal just outside Maputo.

The price that BHP Billiton has to pay for its electricity is linked to the aluminium price.

Hillside's energy consumption alone is sufficient to provide two large cities like Port Elizabeth with electricity.

On Tuesday Minister of Public Enterprises Barbara Hogan said that Eskom had assured her that it was busy re-negotiating the contracts, but she was not personally involved in the talks.

These contracts - which have a life of 25 years, and the details of which are top secret - contributed to Eskom losing R9.5bn last year.

Hogan was addressing the African Utility Week Indaba in Durban on Tuesday.

She said that South Africa stands at a crossroads and partnerships between the state and the private sector are important for energy security.

There is a massive construction programme that requires capital, and government simply does not have sufficient capital to carry the burden alone.

Government believes that private companies should also carry some of the risk in such partnerships.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

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