The Nuclear Power

The amount of money was huge: 111 billion rand, more than 7,5 billion euro, for building 6 to 8 nuclear power plant and turn the government’s project into reality.

When Energy minister Tina Joemat-Petterson, at the end of September 2014, announced a deal with Russia’s State-owned Rosatom, the news was widely commented on by both the press and the public. Most comments were disapproving: people underlining environmental risks and possible delays in the project were joined by those fearing a tax increase to finance the scheduled construction works, the costs of which, according to estimates, might vary from 400 to 1000 billion rand.

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The greatest potential blow to the country’s nuclear ambitions, nevertheless, was given by the ‘Mail&Guardian’ newspaper, which in the last years has often been a vocal critic of Zuma. According to an article which appeared in the paper’s print edition – and whose content was contradicted by the government – the president had “an undue influence” on the talks, negotiating directly with his Russian counterpart, Vladimir Putin, and then instructing Joemat-Petterson to sign the deal. If implemented, the latter would be a major shift in the national energy policy: at present the only nuclear plant operating in SA is that of Koeberg, in the Western Cape.
Following the controversy arising after the deal with the Russians, nevertheless, the government made clear that the agreement with Moscow was not the only one that South Africa was willing to sign, thus denying what Rosatom stated. France, China, Korea, US and Japan were the countries quoted by the government as those with which talks were underway. The first two, between October and November, signed similar agreements marking the beginning of what might turn into a tender for the project.

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Nuclear is not the only field in which the much-publicized effort for change has met with problems. The same is true for hydrocarbon power, with a further paradox: the greatest obstacle to the government’s project are some laws which have been approved by the same parliamentary majority which elected Zuma as president. The “Mineral and petroleum resources amendment bill” (MPRA) was passed in March 2014, ahead of the general elections. Its provisions are highly contested for they give the State a right to have a 20% stake in every new project and to buy the rest, if willing, at a so-called “agreed” price. Moreover, oil and gas producers might see limits imposed on export and price, if hydrocarbons were to be considered as strategic resources.
Less than a month after the May 2014 elections, these concerns were voiced even by the newly-appointed Mineral Resources minister, Ngoako Ramatlhodi, who told the press he had advised president Zuma not to sign the law, something which the head of State has not done up to the end of 2014. Instead, Zuma asked parliament for ‘clarifications’ on the issue, following requests from the Legal Resources Centre and an opposition MP from the Democratic Alliance, Wilmot James. Even so, the norm has already begun to show some negative effects for the country: many international companies, in fact, have interests in the oil and gas sector: among them Total, Shell, ExxonMobil and Anadarko. The latter, just before the elections, announced the suspension of any investment in South Africa until the consequences of the new rules were made clearer.

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The same decision, last October, was also taken by Sasol, the leading South African oil company, which in the country has common projects with Italy’s ENI. In particular, explorative drillings off the Durban coast have been deemed “promising”. However, this project was among those stopped while awaiting for clarifications on the new law. According to the companies – which in principle are not against the presence of the government among the shareholders – hydrocarbons are to be excluded from MPRA and should be the subject of a separate norm, still to be written. This stance is officially motivated by the fact that despite the relevant exploration costs (200 million dollars for a well), no exploitable oil or gas deposits have still been discovered in South Africa. The country, thus, should have a different legislation if compared to that of more promising countries, such as Mozambique and Tanzania.
Being that domestic politics are increasingly a constraint when involved with energy project development, South Africa looks abroad for possible solutions. This choice, however, has forced the country to be involved in various ongoing regional and international crises. (D.M.)


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