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Eskom is looking to bring back lost industrial demand, including from the Mozal aluminium smelter in Mozambique, while increasing electricity exports as it seeks customers for surplus generation capacity.In an interview with Business Day, group CEO Dan Marokane said the return of Mozal could happen within a year if its shareholders finalise agreements, providing a relatively quick source of additional electricity demand after Eskom lost significant industrial consumption.Eskom’s generation performance has improved, while the utility on Monday reported a second consecutive annual profit of R30.3bn for the year to end March 2026. Electricity sales volumes fell 6.2% during the year, with industrial demand particularly weak, down 22.5%.Marokane said the loss of 9.7 terawatt-hours of electricity demand during the year was dominated by smelters, but some of that demand could return after agreements reached with smelter customers.Eskom has secured revised electricity pricing agreements with ferrochrome producers such as Samancor Chrome and the Glencore-Merafe Chrome Venture. The agreements provide for discounted tariffs for a set period to support the restart of smelters. The Samancor agreement runs for five years and the Glencore-Merafe agreement for three years.Read: Eskom profit more than doubles, but weaker sales pose new problemThe need to find customers has become more pressing as Eskom estimates that it could have between 2GW and 3GW of surplus generation capacity over the next few years. Group CFO Calib Cassim said the utility needs to convert that capacity into sales, particularly because it has take-or-pay arrangements with some coal suppliers. This means it has to take the contracted coal and use it to generate electricity.“We need to find ways in which we encourage the growth in terms of base-load demand,” Marokane said. “We have to be creative in terms of stimulating demand, reducing costs and the price of electricity, and still remaining sustainable.”Marokane said Eskom is looking at areas with growth potential, including increasing electricity exports into the southern African power pool, while identifying longer-term sources of demand such as data centres and a revival in the country’s manufacturing sector.He acknowledged that data centres — physical facilities or buildings that house groups of networked computer servers and IT equipment used to store, process and share digital information — and renewed manufacturing activity would take time but said Eskom is planning for at least a five-year period. “This is a long-term business; we don’t plan for tomorrow,” Marokane said. “We see some decline coming, but we need to act now so it starts paying off in years three, four and five.”In the more immediate term, Marokane said Mozal is an opportunity to recover lost industrial demand. The aluminium smelter was placed on care and maintenance in March after its owners failed to secure sufficient and affordable electricity to continue operating. Eskom had been involved in efforts to secure a new power supply agreement.“Mozal’s shareholders are working hard to bring it back, and it is very likely to happen within a year,” Marokane said. Eskom is also looking beyond South Africa for demand.Read: Eskom’s ageing coal plants get new lease on life as farming hubsMarokane said countries north of South Africa continued to need electricity, creating an opportunity for Eskom to grow international sales.“We have to be innovative in how we place excess power north of us. The southern African power pool is still hungry for power, and international sales need to increase,” he said.Eskom already exports to Botswana, Lesotho, Mozambique, Namibia, Eswatini and Zimbabwe through the power pool.Municipal debt remained another major constraint on Eskom’s finances. The debt rose to R111bn at the end of February, from about R55bn when the government introduced its municipal debt-relief programme.Marokane said municipal debt has to be resolved urgently as its continued growth could affect Eskom’s ability to unbundle its distribution business.He identified Eskom’s ability to operate in a reformed electricity market as another key challenge.“The competition is here and we have great plans, but we need to implement them to adapt to this changing landscape,” he said.Marokane said Eskom’s plans include the growth of Eskom Green, as well as addressing the future of different electricity technologies, such as the phase-out of coal, growth in renewables and new baseload in the form of dispatchable power, gas-to-power and nuclear.“We just have to implement these plans. Failure in any of these areas puts Eskom at risk and, by extension, the country,” he said.Eskom’s audit position has improved, although its financial statements remain qualified. The utility went from three grounds for qualification to one, while reportable irregularities fell from five to one.Marokane said the remaining work includes legacy issues and improving controls. Eskom has set itself a three-year target for achieving unqualified financial statements while dealing with legacy issues and cases dating back to 2019.After 24 years at Eskom, including one year as acting group CEO, Cassim will retire from his role as group CFO in 2027. Eskom said it aims to have his successor in place before the end of the 2026 calendar year. Business Day
