South Africa’s Eskom to meet coal supplier over drop in black ownership

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South Africa’s Eskom to meet coal supplier over drop in black ownership

05 Jan, 2017 admin   , ,

JOHANNESBURG – South Africa’s state-owned power producer Eskom will meet with Exxaro Resources after the coal producer approved a transaction that will see its black ownership drop to 30% from over 50%, the utility said on Wednesday.

The diversified miner said in November it planned to replace its existing ownership structure through a share buyback process that would dilute its black ownership.

The ownership issue is important because Eskom’s policy requires new contracts with suppliers that have more than a 50% black shareholding.

Eskom spokesperson Khulu Phasiwe said old contracts such as Exxaro’s would not be affected but it was seeking a meeting with the company about the issue.

“We are suggesting that we should have a meeting very soon,” he said.

A spokesperson for Exxaro declined to comment beyond saying the company anticipated a meeting with Eskomshortly. Shares in Exxaro were 3.6% lower in late Johannesburg trade.

Government and mining companies have often been at odds over the issue of “black economic empowerment”, known locally as BEE, which was established to redress the imbalances of white apartheid rule.

The Chamber of Mines, which represents several mining companies, expressed concern over a revised draft of the mining charter, which seeks to establish a new regulatory agency and impose social development targets on the industry based on revenues.

BY: REUTERS

EDITED BY: CREAMER MEDIA REPORTER

PICTURE SOURCE: Bloomberg