Eskom power plan; Rand fizzles; unemployment high; Sibanye eyes NY; scientists discover early man in Bots

By Jackie Cameron

  • The government issued its big plan to save Eskom, but the details were a disappointment for many hoping to see faster, firmer action. In particular, Eskom’s debt burden hasn’t been dealt with, worry analysts. As Bloomberg reports, the plan includes exposing Eskom to greater competition, lowering fuel costs, increasing renewable-energy output and selling non-core assets. A policy paper released by Public Enterprises Minister Pravin Gordhan envisions Eskom Holdings SOC Ltd. relinquishing its almost century-old near-monopoly of the electricity industry. As a first step, its transmission business will be hived off next year while remaining under the control of a state holding company, a step that will ease the way for private generators to supply the national grid.
  • The rand weakened as much as 1% against the dollar after the release of the plan, leading emerging-market currency declines. The rand fell as much as 1.1%, and traded 0.7% down at 14.6679 per dollar by 1:22pm in Johannesburg, the worst performance out of 24 emerging-market currencies monitored by Bloomberg. Yields on 2028 sovereign dollar bonds jumped 10 basis points to 4.65%, says Bloomberg. Bailouts amounting to $8.7bn for Eskom are straining government finances and may push the budget deficit to the widest in a decade, says the news service. More details about the fiscal framework will be revealed by Finance Minister Tito Mboweni on Wednesday, the next hurdle for the rand. Moody’s Investors Service, the only major company still to rate South Africa’s debt as investment grade, is scheduled to publish a review of the assessment on Friday, adds Bloomberg.
  • Sibanye Gold Chief Executive Officer Neal Froneman is considering moving the South African miner’s primary listing to New York from 2021, after he curbs the company’s debt. Bloomberg reports that the surge in palladium and rhodium prices has put Sibanye on track to meet its debt-to-earnings target by the end of 2020, Froneman said in an interview at Bloomberg’s office in Johannesburg on Friday. While the rally has strengthened South Africa’s platinum industry, power and water shortages, rising crime and onerous regulations are deterring investment, the CEO said.
  • The unemployment rate stayed at the highest level in at least 11 years in the third quarter as construction, factories and trade shed jobs, says Bloomberg. The jobless rate increased to 29.1% from 29% in the three months through June, Statistics South Africa said.
  • Bloomberg reports that the ancestors of modern humans, homo sapiens sapiens, first lived in the Zambezi basin in northern Botswana, according to a study published in the scientific journal Nature. The study, in which researchers from South Africa’s University of Pretoria participated, said the ancestors lived in the wetland region for about 70,000 years, before migrating north and south about 130,000 years ago. “Data suggests that the Greater Zambezi River Basin region, particularly the southwest Kalahari, played a significant role in shaping anatomical modern human emergence,” Vanessa Hayes, an extraordinary professor at the University of Pretoria, said in a statement.
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