Calib Cassim spent Monday morning explaining why Eskom sells electricity to ferrochrome smelters at 62 cents a unit when its average selling price is R2.20. Further down the same media statement, Eskom said he was retiring.
Cassim has been at the utility for 24 years. He arrived in 2002 as chief advisor for financial planning and regulation, took the finance job in 2017, and ran the whole company for a year as acting group chief executive after Andre de Ruyter left. He goes during the financial year ending March 2027, and the board wants his successor in the seat before the end of December.
The discount Eskom is paying for itself
Eskom has a problem it has not had in more than a decade: too much electricity. Better performance at the power stations, weak industrial demand and customers generating their own power have left it with an estimated two to three gigawatts of spare capacity. It is also locked into take-or-pay coal contracts signed when it expected to sell more, which means it pays for the coal whether it burns it or not.
That is the whole logic of the smelter deal. Eskom sells to the Glencore-Merafe and Samancor ferrochrome smelters at 62 cents a unit, a 28% discount on its average price, and absorbs the shortfall itself for a window Cassim puts at three to five years. Some revenue beats none on coal you have already bought. Electricity Minister Kgosientsho Ramokgopa has said Treasury will not step in and other customers will not be billed for it.
The number sitting under the profit
Eskom made R30.3 billion after tax in the year to March, against a restated R14 billion, and a second straight profit after eight years of losses. Sales volumes fell 6.2% to 178TWh even so, and revenue only grew because the tariff went up 12.74%.
Municipal debt is the part Eskom's own statement calls its biggest financial threat. Arrears rose 17.9% to R111.6 billion at year end and reached about R119 billion by June, with a projection of R358 billion by 2031 if nothing decisive happens. A further R15.8 billion that Eskom billed last year was never recognised as revenue at all, because it did not expect to be paid.
Whoever takes the chair inherits all of it, plus a capital programme that grows from R45 billion a year now to over R70 billion from 2029. The board has until December to find them.
