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Speaker 1: Well, Pharaoh Globe, which produces silicon metal, has already said

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Speaker 1: it'll have to shut down, has shut down most of

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Speaker 1: its facilities because of the same issue, the high cost

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Speaker 1: of electricity. Nellis Paster is the chair of the Pharaoh

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Speaker 1: Alloys Producers Association, also the CEO of Pharaoh Globe. Nellus,

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Speaker 1: good evening. I mean, your company is really can't survive

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Speaker 1: with power prices like this, and obviously neither can anyone else.

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Speaker 1: Is there any hope at all on the horizon for

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Speaker 1: all of these people and all of the people who

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Speaker 1: work for them.

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Speaker 2: A good evening, Steven, and great speaking to you again. Yes,

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Speaker 2: I do believe there's a solution. You know.

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Speaker 3: I think if we look at the current state of Escommet,

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Speaker 3: it's generating money, it's got a positive bang balance or

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Speaker 3: increasing revenues, and then there's excess.

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Speaker 2: Power today available. You know, we have the shutdown of

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Speaker 2: the Mosl smelter that has given about eight hundred megawatts

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Speaker 2: edition or to the grid. So I think a solution

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Speaker 2: can be found. And what we saw with the negotiations

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Speaker 2: on the Pherogrom tiff that there can be an option

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Speaker 2: of supplying a competitive tariff to all the beneficiating smelters

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Speaker 2: in South Africa. One just needs to agree on the

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Speaker 2: terms and conditions and that is what is delaying a

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Speaker 2: bit the deal for for Genko Marafi and Semanco at

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Speaker 2: this stage.

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Speaker 1: So the terms and conditions, I mean it's a bit sticky.

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Speaker 1: It seems that neither side really wants to be stuck

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Speaker 1: in something they can't necessarily get out of. I mean,

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Speaker 1: I'm sure it gets very technical, but it's probably about

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Speaker 1: who's going to take up how much power and whether

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Speaker 1: there will be guarantees of that And for ESKUEM that's

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Speaker 1: vital too.

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Speaker 2: Yes, I think we need to understand that you need

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Speaker 2: to commit to restart a certain amount of capacity, so

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Speaker 2: let's call it a certain number of furnaces over a

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Speaker 2: defined period of time. With that also associate that is

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Speaker 2: the job protection or the job creation resulting from that restart.

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Speaker 2: But then ESCOM needs to be sure to also receive

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Speaker 2: the revenue. You know, I think everything to do with

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Speaker 2: a special power arrangement that does have some let's call

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Speaker 2: it take or pay options and some upside sharing mechanisms,

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Speaker 2: which is normal. You know, the beneficiation sector works on

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Speaker 2: commodity prices that goes up and down, and currently they're

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Speaker 2: all at a relative low except for gold and platinum

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Speaker 2: and oil obviously, but the rest of the commodities are

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Speaker 2: quite under constraint at the stage. So these upside and

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Speaker 2: prices will recover over a period in time, and then

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Speaker 2: one has to be able to share some of that profit.

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Speaker 2: I think the question remains what remains affordable and what

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Speaker 2: does not remain affordable, And for that reason, each and

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Speaker 2: every company needs to sit down with s COM and

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Speaker 2: negotiate these terms. They either work for you or they

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Speaker 2: don't work for you.

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Speaker 1: I think most of us as outside as to the

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Speaker 1: see this is someone will have to pay the difference,

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Speaker 1: and that someone would really have to be government. You

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Speaker 1: obviously don't see it like that because there's excess power available.

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Speaker 2: Well, we know that there's a big development in terms

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Speaker 2: of renewables coming onto the grid and the National Transmission

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Speaker 2: Company or South Africa has got a very good plan

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Speaker 2: of extending the transmission network over the next three to

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Speaker 2: five years. So the capacity of ESCOM remains in terms

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Speaker 2: of their goal. Fire power stations we have excess call.

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Speaker 2: We have Goodberg Nuclear power station that gives renewable power,

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Speaker 2: so there's definitely enough generation capacity. The conundrum that one

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Speaker 2: always have to discuss is, yes, you can lose the

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Speaker 2: beneficiation industry in South Africa, but that means es COM

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Speaker 2: also loses the whole revenue associated with that. Plus you

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Speaker 2: run the risk of losing your base load consumption between

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Speaker 2: eight o'clock and night and six o'clock in the morning.

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Speaker 2: That needs to keep the grid stable or yes, there

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Speaker 2: is a reduced tariff, but it still guarantees revenue towards

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Speaker 2: es COM. It stabilizes the grid, It acts as a

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Speaker 2: countermeasure against load shedding when the grid is under constraint,

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Speaker 2: when these smelters can then go into interruptibility to provide

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Speaker 2: power back to the grid. So you know, it's still

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Speaker 2: a win win situation. And when the market recovers then

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Speaker 2: there is the upside sharing portion that that does extend

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Speaker 2: the revenue portion towards es COMMON and government. But yes,

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Speaker 2: for a short period of time you will requi why

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Speaker 2: is some sort of intervention and whether that is funded

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Speaker 2: by government or by ESCOMP that has to be seen.

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Speaker 2: But it is vital to keep this industry and the

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Speaker 2: three hundred thousand employees they do employee today in operation.

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Speaker 1: You would think. So if you were to kind of

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Speaker 1: look at current trends and think where is our grid

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Speaker 1: going to be in tenya's time in terms of supply

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Speaker 1: and where will prices be. The introduction of competition, a

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Speaker 1: lot more independent power produces a neutral gred operator. All

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Speaker 1: of those things would mean hey, there's a lot more

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Speaker 1: electricity for you, and b it will be cheaper and

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Speaker 1: that means that your industry becomes sustainable. Again, do you

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Speaker 1: see this? And am I right in that prediction and

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Speaker 1: that what we're rarely doing is kind of getting you

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Speaker 1: through this particular hump.

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Speaker 2: Yes, we are buying time. We all know that we

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Speaker 2: need to find a long term solution in terms of

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Speaker 2: power pricing for industry as all in South Africa. It's

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Speaker 2: not just for beneficiation, it's also for intensive power consumers,

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Speaker 2: which is like the steel stainless steel industry. Your big minds,

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Speaker 2: that's a long term solution we need to find. We

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Speaker 2: are best with a lot of opportunity in terms of

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Speaker 2: renewables and it is expanding tremendously quickly. We just saw

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Speaker 2: what was the impact when you know public went to

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Speaker 2: home solar and we are talking already in the excess

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Speaker 2: of six five hundred megawatts of installed rooftop solar, which

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Speaker 2: is a burden that's taken away from ESCOM except for

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Speaker 2: the pig hours. So naturally we need something to balance

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Speaker 2: between now and let's say two years from now, three

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Speaker 2: years from now, when all these renewables kick in, the

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Speaker 2: transmission network will be capable of handling more more power

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Speaker 2: transmission by that stage. And how do we integrate from

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Speaker 2: an old ESCOM to a new ESCOM with the support

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Speaker 2: of a total new renewable power supply base, you know,

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Speaker 2: And and that changed the whole economics of scale, of

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Speaker 2: how you calculate power pricing and the consumption thereof totally.

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Speaker 1: You know, Nellis, thank you so much. Nellis Pasta. It's

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Speaker 1: the chair of the Pharaoh Alloy Producers Association, also the

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Speaker 1: CEO at Pharaoh Globe