Eskom, Unions Hold New Talks to End South African Blackouts

(Bloomberg) -- South Africa’s state-run electricity producer and its labor unions have agreed to hold new negotiations over pay, the government said, ending protests at power plants that have caused disruptions to power supply.

Public Enterprises Minister Pravin Gordhan called a meeting Friday with Eskom SOC Holdings Ltd., the National Union of Mineworkers, the National Union of Metalworkers of South Africa and the Solidarity union “to normalize relationships and normalize operations” at the utility, he said in a statement. It was agreed at the talks that Eskom’s proposed zero-percent wage increase is “off the table,” Gordhan said.

The government intervention wasn’t enough to spare South Africans from power cuts on Saturday night. Stage-two load shedding started at 5 p.m. and may last until 9 p.m., Eskom said in a statement, using a local term for rolling blackouts. The utility had said earlier that the power system would be “severely constrained” amid cold winter weather. There are four levels of cuts, with the second stage indicating a shortage of as much as 2,000 megawatts.

Eskom, which generates almost all of the nation’s electricity, has been locked in a dispute with workers after wage talks broke down last week over the state-owned utility’s insistence that it can’t afford pay increases. The company began cutting power to some areas Thursday night for the first time since 2015, as demonstrators blockaded roads and attacked staff.

The protests by employees came at a tough time for Eskom and the South African economy more broadly. While demand for electricity increases over the Southern Hemisphere winter, Eskom has also battled coal shortages, allegations of corruption and mismanagement, and struggled to raise the funding it needed earlier this year. A prolonged repeat of outages from three years ago would undermine signs of recovery in Africa’s most-industrialized economy.

The utility got a court order declaring the protests unlawful and prohibiting the intimidation of other workers and contractors. Employees were also barred from hijacking coal trucks and sabotaging Eskom’s electricity infrastructure.

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