BHP power contracts imply $323M subsidy in S. Africa

Mar 27, 2013 | 10:11 AM | Bianca Markram

Tags  BHP Billiton, Eskom, South Africa, Hillside, Bayside, National Energy Regulator of South Africa, Nersa, aluminum Metal Bulletin

JOHANNESBURG — Details of the electricity supply contracts between BHP Billiton Plc and South Africa’s power utility Eskom Holdings SOC Ltd. that emerged March 22 imply a subsidy of about 3 billion rand ($323 million) per year towards BHP’s electricity prices.

The National Energy Regulator of South Africa (Nersa) said it will conduct hearings in April to investigate the terms of the contract and the implications for other power users.

Last week, a court denied an appeal from the diversified miner to keep the terms of the controversial electricity contracts secret (, March 19).

Details of the pricing formula used to determine the Hillside and Bayside smelters’ electricity tariffs emerged after Eskom revealed the contracts to Media24, the newspaper that started the legal action to make the contracts public. ....

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