Eskom increases- the ANC govt is the spear of Anglo American (the Cosatu leaders, its shield)

Around the world, industries are closing down, mass retrenchments continue apace. The major banks and monopolies of the world face a crisis of falling profits. These gangster capitalists have hatched new plans to put the burden of decline onto the backs of the working class- they have artificially increased the price of food; they increase their smuggling of raw materials out of Africa (through transfer pricing- eg Anglo American labelling Platinum as cheaper Palladium and so escaping paying tax and taking trillions of dollars in value of goods out of Africa); another mechanism is to open industries/sectors that were usually under state control and out of the capitalist market, and making commodities out of them. Examples of this, is the privatization of health and education, and of course, now, electricity.

In South Africa, since 2008, more than 1 million workers were retrenched and thousands of companies closed. The clothing and textile industry has virtually been destroyed. As companies use about 80% of total electricity, the overall usage has declined. Under the current capitalist relations, there is no prospect of mass new industries opening up. Even current housing development is so small that the extra electricity needed is negligible. Besides this, the real cost of household electricity is falling (for example, there are instant water heaters which make the need for geysers obsolete- much of current household electricity is wasted on keeping hot water in a tank that is not used for most of the day). This shows that the Eskom plan to double electricity generation within 10-15 years is a hoax- it is a cash cow for Anglo American and the major US banks that control the Southern African economy.

How Anglo American and the major US banks benefit from the coal and nuclear electricity scam

Firstly, there are such advances in solar, wind, wave and hydro electricity that coal and nuclear power stations are already historically obsolete. (Alternative energy will no longer be alternative- The Economist -21 Nov 2012). In other words, there is no need for any new power stations to be built based on coal and nuclear because solar power is already cheaper and its costs are falling all the time. Eskom lies about coal being cheaper to build than solar as they ignore the fuel costs- coal power stations require huge amounts of coal all the time while solar requires no fuel input as sunlight is free. Nuclear power already costs many times the cost of the most expensive solar power plant. Even in the heartland of imperialism, coal power stations are closing every day. (in the 1980’s the USA was 80% dependent on coal, now they are only 33% dependent on it). Already the world solar production increased by 86% last year and is set to continue to rapidly expand.

So if there is no need for coal and nuclear power stations, why is Eskom insisting on spending trillions of Rands on it? The point is that Eskom is not an independent entity- it acts as an arm of Anglo American and the major US banks. This is so because the main beneficiaries of the Eskom scam build programme is Anglo American and the US banks:

·         In 2008 ( we reported that Anglo American and the major corporates who were high energy users were only paying 12 cents per kWh (while the rest were paying a minimum of 44 cents). Eskom argued they had long term contracts with Anglo and others so could not increase their rate. Assuming that Anglo had to pay 25% annual increase over the past years, this still means that they currently pay less than 40 cents per unit (while the rest pay over 113 cents per unit). Thus those who use the most electricity are being subsidized by the worker in the squatter camp, the rest of the masses and small industry.

·         Anglo American has a 40 year contract to supply coal to the new Medupi power plant- a completely artificial business as there was no need for coal power plants to be built;

·         JP Morgan Chase, the same bank which controls Anglo American, also controls Hitachi which won generator contracts for Medupi; the concrete for the structure was also supplied by Anglo American; the major construction companies which ‘won’  the  build contract are also controlled by US banks.

·         If the nuclear build programme goes ahead, Anglo American controls the Uranium reserves, so they will again be the major beneficiary. The cost is so huge that the generations for the next 200 years will have to pay for these costs.

·         Eskom is also asking for an increase of an extra 3% to provide for ‘independent power providers’- in other words, the masses are asked to subsidize capitalists to enter and make money out of electricity generation- the major beneficiary will be Anglo American and the US banks- the only ones with the scale of finance to enter this sector as a ‘competitor’ ;

·         To add insult to injury, Eskom wants to increase their rate of profit from 0.9% to 7.8%- thus they want to increase the price of electricity so that Anglo American or its empowerment front companies can become private suppliers of electricity and make bags of profits from this.

Thus the statement by Cutifani, the head of the Chamber of Mines that they are concerned about and oppose the electricity increase, is another big lie. They lie to deflect attention of the masses from who is really responsible for this attack on the masses.

The ANC govt is the spear of Anglo American

The ANC appoints the Eskom and Nersa boards and thus is politically responsible for the attack that Eskom is launching on the masses of the region. As the main beneficiary of the Eskom scam is Anglo American and the US banks, the ANC govt acts as the spear of US imperialism. The New Growth Plan has as its centre-piece the infrastructure build programme which is focused on the coal and nuclear power station construction. 

For a bribe of R3bn to the ANC-connected Chancellor House company, that also benefited out of the scam electricity programme, the ANC govt has put the masses into greater misery for generations to come. Trillions of Rands are being handed over to Anglo American and their front companies, now and for the future. The ANC govt is the spear of Anglo American- the bourgeois media, Amabhungane and Cosatu’s Corruption Watch are all silent on this massive corruption by them.  


The Cosatu leaders are the shield of Anglo American

Ever since the attacks on the working class through high electricity price increases began in 2008, the Cosatu leaders have not waged a real fight against it, despite the masses being willing to fight. Last year, when the increase was reduced from 25% to 15%, Cosatu leaders called it a ‘victory’, while millions are now living in the dark. By refusing to call consistent mass action to stop the electricity increases, the Cosatu leaders are protecting the main beneficiaries of this scam, Anglo American- that is why we say the Cosatu leaders are the shield of Anglo American. Even the economic policy of Cosatu supports the scam build programme that benefits the monopoly capitalists.

On every class battle the ANC is on the same side as the monopoly capitalists- they refuse to support even the paltry R150 a day for farm workers, they carried out the Marikana massacre to protect Anglo American and the Lonmin bosses, they do not act against the Pick ‘n Pay and other major retailers for the high price of food, the ANC govt is even demolishing houses that some people are building out of frustration with the deliberate slow pace of house construction that helps keep housing prices among the highest in the world; the ANC and DA govts are closing schools and supporting the privatization of education.

Yet in September last year, the Cosatu leaders supported, unanimously, the re-election of the same leadership of the ANC who have led the attacks on the working class.

The Numsa, Saccawu and Fawu leaders have embarked on a programme of pickets of the Nersa hearings- can they be taken seriously? These are leaders that are afraid of their own base, going through the motions so they can say they ‘tried’. In their joint statement of 28th Jan 2013 they do not even challenge the principle of the coal build programme, instead they make a vague statement that coal should be brought under ‘democratic control’.  Under the control of the same ANC govt that is spearheading the attacks of Anglo American? that says they will defend the mining capitalists with their lives? These leaders still want the trillions to be handed over to Anglo American, they only want the govt to make longer term loans and slight improvements so that the burden is spread over a longer period.

The Cosatu investment company, Kopano ke Matla, has a joint venture with Indian company NMDC so that they share the coal earnings that fall from Anglo American’s table in the Eskom scam. How can the Cosatu leaders be taken seriously if they say they ‘oppose’ the electricity increase? The Cosatu leaders organise symbolic action and prevent a full scale struggle against Anglo American. In fact the Cosatu leaders are already signalling a betrayal as they say that an ‘inflation-related increase’ of electricity is ok, in other words, they will no mobilise widely as they are signalling that a 8-12% increase is acceptable to the working class; once again they will claim that this is a ‘victory’ when millions live in the dark.


The Way Forward

As long as Cosatu is alliance with the ANC, the workers struggle will always be sabotaged from within by the Cosatu leaders. We could say that Anglo American rules and bullies the masses today because of the Cosatu leaders, their shield. As most Cosatu workers are now saying, the federation should break with the ANC. The SACP gives the betrayal by the ANC a ‘Socialist’ cover- they have failed, in fact their leaders are part of the gravy train. It is time to build a revolutionary workers party, that unites workers of Africa and the rest of the world.

·         End the electricity subsidy to the monopoly capitalists, they should pay the same proportionately more, according to their use;

·         Abolish profiteering by Eskom, place it under workers control; no to any privatization of electricity generation

·         Free 200 units per household per month

·         Expropriate Sasol, the coal and construction sector, without compensation to the capitalists, placing it under workers control;

·         Cancel Medupi and force all the construction monopolies like Murray & Roberts, Group 5, etc, to repay the billions they stle through the decades through collusion with higher tenders- failing which all these giant companies should be expropriated without compensation and placed under workers control. All new electricity generation should be solar, wind or hydro and phase out coal and nuclear power

·         Expropriate Anglo American, without compensation, placing it under workers’ control;

·          For the retraining of the geyser sector workers to build and install instant water heaters and solar powered geysers;

·         For worker-controlled price committees; for an immediate reduction in the price of electricity and food;

·         For workers committees (anti-Eskom/Anglo committees) to be set up at all workplaces and in all working class communities, uniting all workers, irrespective of union affiliation, whether local or immigrant, permanent or casual, employed or unemployed. These committees should organise lunchtime pickets, marches to council offices, marches to provincial government and marches to central govt offices (including the Union buildings and parliament), marches to Anglo American offices.

·          Sweep out the ANC-aligned leaders from the Cosatu leadership;

·         Prepare the way towards a general strike uniting all struggles of the masses, including the mineworkers and farm workers, until our demands are met.


1 Feb 2013 Workers International Vanguard Party (amended 9 Feb 2013)  Email:

 ph 0822020617 1st Floor, Community House, 41 Salt River rd, Salt River, 7925