South Africa’s Eskom reaches tariff agreement with BHP Billiton

By bne IntelliNews April 22, 2010
Reuters reported SAPA news saying South Africa'spower utility Eskom has reached an in-principle deal with BHP Billiton thatwill release it from a tariff agreement which triggered book value losses. SAPA quoted Eskom acting chief executiveofficer and chairman, Mpho Makwana, as telling a parliament committee therenegotiated contract with the mining giant was subject to audit and should besigned on May 27. He added the contract to supply electricity to the miningfirm's Mozal and Hillside aluminium smeltersaccounted for 95% of Eskom's embedded derivative liabilities that led to a bookvalue loss of ZAR 9.5bn last year and that Eskom had been held to ransom by thelong-standing liability on derivatives that linked the tariff to aluminiumprices.

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