Written By: Jemosop Faith
While millions of South Africans are tightening their belts just to keep the lights on, one company is quietly enjoying the luxury of discounted electricity.
That company is South32, and its Hillside aluminium smelter in Richards Bay is the single biggest electricity consumer in the country responsible for 5% of all Eskom’s energy sales. Yet, thanks to a long-standing deal, Hillside pays just half price for its power.
According to a report from Meridian Economics, this discount will cost Eskom a staggering R92 billion (roughly $5.04 billion) over 10 years in foregone revenue.
Let that sink in: while Eskom cries poor and raises tariffs for households by R1,615 ($88) per month on average, it’s quietly burning through billions in potential revenue to subsidize a multinational mining giant.
Eskom’s official line? The deal supports manufacturing jobs and ensures South Africa remains competitive in the aluminium sector.
But the real story is murkier.
Open Secrets, a non-profit investigating corruption and accountability, uncovered critical flaws in the deal. Michael Marchant, Head of Investigations, revealed that Eskom had requested South32 itself to supply data proving its benefit to the South African economy.
That’s like asking a student to mark their own test and then awarding them full marks.
Worse, Nersa, the national energy regulator, was apparently happy to take South32’s word for it. No independent audit. No transparent evaluation. And, when pressed, both Eskom and Nersa released documents so heavily redacted that they are essentially meaningless to the public.
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This is a textbook case of regulatory capture, when the entities meant to oversee public interest are co-opted by the very corporations they regulate.
To make things even more infuriating, Hillside is one of the most energy-intensive operations in the hemisphere. It consumes 10.3 terawatt-hours (TWh) of electricity each year, more than is typically cut during Stage 1 of load-shedding.
That means when the grid goes down for households, Hillside likely keeps humming on a discount.
Of course, aluminium smelting is important. It’s vital to construction, tech, and export revenue. But that doesn’t justify sweetheart deals that undermine public trust.
And let’s not forget: South32 is not a struggling SME. It’s a multinational giant. If it believes in its local impact, it should welcome independent scrutiny. Instead, the public is being asked to take its word for it while paying double.
If Eskom wants to increase prices, it must first end double standards. If Nersa wants to regulate, it must do so in the public interest. And if South32 wants to enjoy public resources, it must submit to public accountability.
Until then, the real question isn’t why Eskom is failing. It’s who it’s failing for.
