It is reported that Eskom have to ‘pay through the nose‘ to secure an additional 45 million more tonnes of coal over the next two years to meet the demands for coal at the power stations. Without this coal there could be even more power problems in South Africa and thus Eskom really do not have much of a choice but to buy this coal. The additional coal required will cost Eskom about R11bn.

Under contract, Eskom pays on average R100 a ton for coal. But the 45 million additional tons would have to be bought at export prices of R150-R250 a ton.

Now chances are high that electricity prices in South Africa could be increased due to this transaction. If Eskom is procuring the coal at a much higher price than before (almost 50% more) then surely this cost is going to be passed down to the consumer? Eskom executive, Brian Dames, said “The coal is going to cost much more than we are paying contractors, so it will definitely have an effect on generating costs. We still need to inform the regulator (the National Energy Regulator of SA),” (Source: Business Day) So we could easily be seeing an electricity price increase soon in South Africa.

The R36.7bn deal between South Africa’s Standard Bank and China’s Industrial and Commercial Bank of China (ICBC) was confirmed today and all regulatory and shareholder requirements had been fulfilled. The deal will result in ICBC purchasing 20% of Standard Bank. For more information about the deal, have a look at ‘Standard Bank confirm China deal‘.

For the investors and shareholders in Standard Bank, the last day to trade in Standard Bank shares to be considered for this scheme is February 22 2008. Under the scheme, ICBC will acquire 11.11% of the Standard Bank Group’s issued ordinary share capital from existing ordinary shareholders. The shareholders will be offered R136 per share. Standard Bank shares closed at R93.25 today.

The platinum price hit a record high today as it reached the $1 915 an ounce mark. This all largely due to the current electricity problems being faced in South Africa. Platinum and other metal production in the mineral rich country are being hampered after the supply of electricity has become limited to the mines. Efforts have been made to restore some electricity to the mines but this seems to be a short term measure as the future outlook for the electricity supply in South Africa looks bleak. Read the rest of this entry »

At lunch time today (8 February 2008), the rand traded at R7.8675 against the dollar after having earlier reached the R7.875 mark. It is not looking too good for the rand this moment in time and the rand is under pressure. Factors such as the country’s political and economic future are playing a major part in determining where the rand is headed. It could just be a matter of time before the rand reaches the R8 mark against the dollar.

MTN are at it again and this time they have launched a new product which is very creative. The MTN Zone product is different in the sense that MTN subscribers get a discounted call rate depending on the volume of traffic currently on the MTN network they are using. So for example, if I was using MTN and the area I am located in has low levels of traffic i.e. fewer subscribers making fewer calls, I would then be given a discount for using my MTN line in a low traffic area.

When I first read about this MTN Zone product I thought to myself, “Wow, what a great deal!” Especially since it was mentioned that one could get a discount of up to 95% per call. But then upon further investigation I found that this MTN Zone and discounted rates only apply for calls made from MTN to MTN subscribers. Read the rest of this entry »

It may have taken a while, but the effects of high interest rates in South Africa are now really starting to catch up to the consumers. New vehicle sales declined last month for the first time in five years. It is not only due to the high interest rates that sales have gone done but other factors such as rising inflation and high household debt have played their part. Read the rest of this entry »

They may not have been an interest rate hike last week but it seems like the misery will continue on as the price of fuel is set to go up again on Wednesday (6 February 2008). The petrol pump price will go up by 17 cents a litre. That will mean a litre of petrol will now be costing R7.64 in South Africa. The price of diesel will also go up by 7 cents a litre to R7.32.

Be sure to fill up your tank on Tuesday before the increase kicks in on Wednesday.