Grid Lock

How South Africa grid is the key to The EU Industrialization

"All I know is gold and platinum, and I want to be platinum." — The Notorious B.I.G.

Leaders of Soviet Union and Cuba

The Soviet Union’s dissolution in 1991 yanked the rug out from under Cuba. Overnight, oil imports plummeted 50%—from 11 million tons to 5 million—crippling the baseload grid. Plants designed for Soviet crude couldn’t handle alternatives; blackouts soared to 12-16 hours daily during the “Special Period” (1991-1995). The grid, already creaky from underinvestment (maintenance lagged as Soviet aid focused on volume, not resilience), buckled. Sugar production tanked—down 40% by 1993 (from 8 million tons to 4.4 million)—as mills sat idle without power. Exports crashed 70%, and GDP shrank 35% in three years. The resource the Soviets bet on was useless without the grid they’d propped up.

This wasn’t a natural disaster but a collapse triggered by Cuba’s failure to diversify its energy sources. Ninety percent of its energy had been oil-based, with no backup from coal or nuclear power. Corruption and mismanagement worsened the situation—fuel theft and inefficiencies were rampant, and essential spare parts vanished when Soviet technicians left the country. The U.S. embargo further strained the situation, but the failure of the grid was the most significant blow. The Soviet investment in Cuba’s sugar industry evaporated, and the entire economy faltered as the power supply collapsed.

South Africa’s energy sector is currently facing a similar crisis. Corruption, failing infrastructure, and criminal syndicates have crippled its once-thriving energy system, which supported the country’s position as an economic powerhouse in Africa. The EU is betting on South Africa’s platinum sector, hoping it will play a key role in future industrial strategies. But questions loom: Can South Africa’s energy grid withstand the demands of platinum mining, and is the EU’s investment a sound one?

South Africa is the world leader in platinum group metals (PGMs), controlling 80% of global reserves and 70% of production, with 4.3 million ounces produced in 2023. Platinum mining is vital to the country’s economy, contributing $11 billion in exports and employing over 181,000 people in an economy struggling with 32.1% unemployment. However, platinum mining is highly energy-intensive, and its viability depends heavily on South Africa’s coal-powered electricity grid, which is increasingly unreliable.

For decades, South Africa’s energy infrastructure has been built around its abundant coal reserves, with Eskom, the state-owned utility, powering the country’s industrial growth. Eskom provided some of the cheapest electricity in the world during the 1980s, which fueled South Africa’s mining and manufacturing sectors. But this energy model was not built to last.