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Cape Town – It must be compulsory for any company doing business with government and state-owned entities (SOEs) to have 60% black ownership, the African National Congress Youth League (ANCYL) has urged.

The ANCYL encouraged National Assembly to effect this call.

“We call on our National Assembly to make it law across all departments that for people to trade with the state and SOEs, the company must have 60%… black ownership,” spokesperson Mlondi Mkhize said in a statement on Friday.

The youth body was responding to a spat between Eskom and Exxaro [JSE:EXX] after the miner announced plans to transform itself from a black-owned company to a black-empowered one.

It also came after the Economic Freedom Fighters (EFF) backed the power utility in its concern over the coal miner’s new ownership structure.

“We encourage Eskom to instruct Exxaro and all its other suppliers to have 51% black ownership through workers’ ownership schemes, and must never retreat on the demand that Exxaro must be empowered at minimum of 51%,” spokesperson Mbuyiseni Ndlozi said in a statement on Thursday.

“This should be so because in anyway, the mines which Exxaro mines coal from are assets that are largely owned by Eskom.”

Exxaro raised the ire of Eskom acting CEO Matshela Koko after shareholders approved a transaction that will result in its black ownership declining from 50% to 30%.

Koko shared his thoughts on Exxaro’s move in a couple of tweets.

“Radical economic transformation is dealt a heavy blow by Exxaro,” he said in one tweet. “Indeed black management control is necessarily progressive.”

Eskom’s coal procurement policy requires all the mines that supply coal to its power stations to have a black ownership target of more than 50% throughout the life of the mine.

Eskom’s policy of sourcing coal from majority black-owned suppliers is a thorn in the side of many of the company’s main coal suppliers, Koko said in a December statement.

“The ANCYL wants to encourage Eskom to continue with this progressive demand which is intended to transform our economy particularly and ensure the participation of black people in the mainstream economy,” said the ANCYL.

“We further call on state-owned enterprises and government departments to take the same stance by adopting a similar policy like Eskom.”

However, the youth body went on to say Eskom should demand nothing below a 60/40 ownership, including a stake for the youth.

“The ANCYL further wishes to request Eskom that this demand should be extended to all service providers who are giving services to Eskom, as they continue to explore ways of ending outsourcing and over reliance on service providers.”

Eskom must terminate the services of Exxaro if the company refuses to honour this request, it said.

The youth league added that “arrogance from private capital” validates their view of “nationalising mines and other strategic sectors of the economy” in order to benefit all South Africans.

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