Eskom kissing its R9 billion-a-year headache goodbye – BusinessTech
State-owned power utility Eskom is phasing out the use of copper cables due to high levels of theft of the item.
According to a report by the Global Initiative Against Transnational Organized Crime (GI-TOC), stolen copper cables, overhead lines, copper used in conductors, and copper stored for later use cost Eskom between R5 billion and R7 billion a year, plus about R2 billion to replace them.
“We are moving away from using copper because we have seen that it is quite in demand, so whenever we have any cable that has been stolen, we do not replace it with copper,” Gauteng Eskom spokesperson Amanda Qithi told the SABC.
The mineral, the second-best conductor of electricity behind silver, is in high demand – especially among criminal syndicates.
The sought-after metal is widely used in various sectors, including water, rail, fuel and oil, communications, electricity, military, health, vehicle production, and more.
“Consequently, there will always be a market for it, and thieves find ready sources of the metal in South Africa’s poorly maintained and guarded national infrastructure,” said Corruption Watch.
According to the Economic Sabotage of Critical Infrastructure Forum, the theft of copper in South Africa is estimated to cost the country R46.5 billion a year across its various portfolios.
Qithi said that in response, Eskom has been installing vibration sensors in cables, which pick up when cables are being tampered with and send a signal to a control room, which then sends security to investigate. However, it has not made the dent that it had hoped for.
In hopes of deterring this massive issue for public infrastructure, in 2015, the legislature enacted the Criminal Matters Amendment Act, which could see perpetrators sentenced to 30 years and private companies fined R100 million for tampering, damaging or destroying critical infrastructure.
However, according to GI-TOC, this has not deterred copper thieves, who largely fall into two categories – organised crime syndicates who commit large-scale theft and petty or subsistence thieves who steal only what they need.
According to GI-TOC researcher Jenni Irish-Qhobosheane, corruption plays a big role in the growth of illicit copper networks and markets.
“This can range from employees using their access and position to facilitate the theft of copper to employees or security officers being paid by syndicates to provide information or, in the case of security officers, to assist criminal actors in safeguarding their operations” she said.
According to the research report by GI-TOC, the legal copper market is valued at about R10 billion annually, and the metal is sold largely locally and, to a lesser extent, exported.
The report notes that the illegal market is much harder to quantify because of its very nature.
However, “it appears more is exported than in the legal trade. Scrap dealers often melt stolen copper down into ingots or granules, which until recently did not require an export permit,” said Irish-Qhobosheane.
“Alternatively, buyers may destroy any identifying marks before reselling the product on the domestic market,” she added.
Domestically, some stolen copper is reprocessed and laundered back into the legal market, making it hard to track and trace the metal.
The in-depth report on South Africa’s illicit copper economy can be found here.
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