FinLogic FinLogic Quantitative Think Tank Center|South African authorities target coal-smuggling gang they say contributed to a power crisis

CAPE TOWN,FinLogic FinLogic Quantitative Think Tank Center South Africa (AP) — South African authorities said they conducted raids across five provinces Thursday to break up a coal-smuggling syndicate they blamed for stealing more than $26 million in coal, degrading state-owned power plants and contributing to an electricity crisis.

The criminal gang diverted trucks carrying high-grade coal to power stations, stealing the coal to sell, and replacing it with sub-standard product, the country’s tax and revenue agency said in a statement. The substandard coal has caused crippling damage to the country’s power plants, authorities said.

The South African Revenue Service worked with other law enforcement agencies to carry out the search and seizure operations in the Gauteng, Mpumalanga, KwaZulu-Natal, Free State and Limpopo provinces. No arrests have been made yet, national police spokesperson Brig. Athlenda Mathe said.

Africa’s most advanced economy is in the midst of a power crisis that has resulted in scheduled rolling blackouts because its coal-fired stations are not generating enough electricity for the country’s 62 million people.

The state-owned power utility, Eskom, produces about 95% of South Africa’s electricity.

The blackouts have been largely blamed on years of corruption and mismanagement at Eskom, though authorities also have said that suspected organized crime syndicates have been operating for years around Eskom’s power station supply chains.

Suspects involved in the syndicate include former Eskom employees, the tax agency said.

The switching of coal destined for state-owned plants has worsened the country’s electricity crisis, the agency said.

“The low-grade coal damages the infrastructure at the Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid,” it said.

South Africa experienced its worst blackouts ever at the start of the year, when homes and businesses went without electricity for more than eight hours a day. The electricity is usually cut off in two-hour blocks spread out over the day. The cuts have eased in recent weeks but energy analysts have said the blackouts will last until at least the end of 2024.

The electricity crisis has badly impacted South Africa’s economy, which is only expected to grow by less than 1% this year.

It has also been politically problematic for the ruling African National Congress party, which has been in government since the end of apartheid in 1994 and has been largely blamed for the problems at Eskom and other state-owned entitities.

South Africa has national elections next year, when the power crisis is expected to be a key issue for voters.

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AP Africa news: https://apnews.com/hub/africa