EFF backs Eskom in black ownership clash with Exxaro

Cape Town – Eskom has found a new ally in Economic Freedom Fighters (EFF) spokesperson Mbuyiseni Ndlozi, who backed the power utility in its concern over the coal miner’s new ownership structure.

“We encourage Eskom to instruct Exxaro and all its other suppliers to have 51% black ownership through workers' ownership schemes, and must never retreat on the demand that Exxaro must be empowered at minimum of 51%,” Ndlozi said in a statement on Thursday evening.

“This should be so because in anyway, the mines which Exxaro mines coal from are assets that are largely owned by Eskom.”

Last Friday, Exxaro's [JSE:EXX] shareholders approved a transaction that will result in its black ownership declining from 50% to 30%.

Following news of the approval, Eskom acting CEO Matshela Koko tweeted that Exxaro showed “Eskom a finger instead of radically transforming and has no decency to even engage on this matter”.

“Radical economic transformation is dealt a heavy blow by Exxaro,” he further tweeted. “Indeed black management control is necessarily progressive.”

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Ndlozi agreed, saying the EFF believes Eskom’s 51% black ownership policy must be strictly applicable to all Eskom suppliers, “with the aim of making sure that all Eskom suppliers are minimum owned 50% by indigenous black South Africans”.

He used the opportunity to announce plans by the EFF to table a special draft resolution in Parliament to force state-owned companies’ suppliers to have 51% black ownership. The EFF wants this to be through workers' ownership schemes.
 
“The EFF strongly believes that all other state-owned companies must adopt procurement policies that instruct their suppliers to also have 51% black ownership through workers' ownership schemes.

“This way, many workers will begin to benefit from the companies they work for.”
 
Eskom, which is planning to meet Exxaro soon over the reduction in black ownership, said its coal procurement policy requires all the mines that supply coal to its power stations to have a black ownership target of more than 50% throughout the life of the mine.

Koko said in a December statement that Eskom’s policy of sourcing coal from majority black-owned suppliers is a thorn in the side of many of the company’s main coal suppliers.

These suppliers subscribe to a “once empowered always empowered” principle, and a black ownership target of 26% rather than a minimum of 50% black ownership, he explained.

“What is actually happening is that the ongoing legacy of the pre-1994 economy is being confronted by the Eskom leadership. This is the legacy that we have not worked hard enough to dismantle, and at times have been frightened to confront. Eskom has resolved to do something radically different.”