Eskom ordered to reveal coal contracts in transparency ruling

South Africa’s second-highest court has dropped a legal bombshell: every coal and diesel contract that keeps the lights on - or off - at Eskom must be laid bare for public inspection. On 23 March 2026 the Supreme Court of Appeal dismissed Eskom’s appeal with costs, ruling that “commercial secrecy” is no shield for a utility that burns through roughly R70-billion of taxpayers’ money each year just to buy and move coal. The unanimous bench found Eskom had failed to show even a single rand of verifiable harm that would follow open publication of the agreements.

The case began when AfriForum, a civil-rights group better known for minority-rights advocacy, lodged a Promotion of Access to Information Act (PAIA) request in 2022. Eskom refused; AfriForum sued; two lower courts agreed with AfriForum; Eskom appealed; the appeal has now crashed and burned. What looked like a routine access-to-information scrap has become a constitutional landmark: any state-owned company that spends public money must prove - clause by clause - why disclosure would hurt more than secrecy.

The judgment arrives as Eskom limps through its fifteenth straight year of load-shedding, while carrying government guarantees of R350-billion and having absorbed R230-billion in direct bail-outs since 2007. For the first time citizens, journalists and rival suppliers will be able to compare what Eskom actually pays against spot coal prices, transport benchmarks and diesel wholesale rates.

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How Eskom Built - and Lost - Its Secrecy Fortress

For two decades Eskom’s default position was simple: trust us, the contracts are too sensitive to release. Executives claimed that publishing prices, volumes or penalty clauses would undermine future negotiations and “inevitably” push up tariffs. The court torpedoed that argument in three crisp paragraphs. First, coal and diesel are globally traded commodities whose prices are published daily on public exchanges. Second, Eskom itself runs open tenders, so the identity of winners, volumes and closing prices are already semi-public. Third, the utility could not produce a single affidavit from a supplier saying, “We will charge more if the public sees our deal.”

Judges noted the paradox: Eskom wants the legitimacy of competitive bidding without the accountability that follows. The ruling therefore shifts the evidentiary burden. From now on the entity that withholds information must show, with facts not slogans, why each blacked-out line would cause commercial harm. Generic claims of “market sensitivity” or “competitive disadvantage” will be laughed out of court.

Lawyers say the ratio decidendi will echo far beyond Eskom. Transnet, PetroSA, Denel and the six metropolitan municipalities that buy electricity in bulk all use near-identical confidentiality clauses. Those clauses are now legally shaky, and PAIA requests are already being drafted.

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Inside the Coal Fleet: 100 Mines, 1 000 Trucks, Endless Red Flags

Eskom buys roughly 120 million tonnes of coal a year from more than 100 mines scattered from Mpumalanga to Limpopo. Some mines sit 400 km from the power stations they feed; others are connected by conveyor belts that cross public roads and private farms. The court’s disclosure order covers every rail tariff agreement, every “take-or-pay” clause that forces Eskom to pay for coal it does not burn, and every middle-man mark-up baked into trucking contracts.

Academics at the University of Cape Town’s Energy Research Centre have already flagged three patterns they expect to find once the files land. First: intermediary traders who add 8-12 % to the mine-mouth price for “arranging” deliveries that Eskom could have sourced directly. Second: quality discounts that never reach consumers - stations receive coal with 20 % ash when contracts allow 16 %, yet the price is not reduced. Third: diesel-boosting contracts in which suppliers deliver wet coal, forcing power stations to burn extra diesel to stabilise combustion.

The poster child for murky dealings remains Tegeta Exploration, a Gupta-linked firm that bagged a R659-million pre-payment for coal it could not physically supply. The new data set should reveal whether similar ghost deliveries continue under different company names.

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Diesel: The R12-Billion Emergency That Became Baseload

When coal stockpiles run low or units break, Eskom fires up open-cycle gas turbines (OCGTs) originally meant for peak-hour emergencies. These turbines now burn more than a billion litres of diesel a year - enough to fill 400 Olympic pools - at an annual cost north of R12-billion. Because the fuel is trucked in convoys that stretch 40 km from Durban harbour to Ankerlig power station, price transparency has been nil.

Early leaks suggest some suppliers charge “convenience fees” of up to 35 c/l above the wholesale rack rate. On a billion litres that is R350-million a year - money that could have bought 400 MW of rooftop solar panels. The court files should show whether these premiums are linked to middle-men, politically-exposed logistics firms, or simply sloppy procurement.

Consumers will finally be able to compare the true cost of running OCGTs against the levelised cost of utility-scale batteries. Industry analysts predict the numbers will make Eskom’s recent battery tenders - priced at roughly R1.20 /kWh - look like a bargain next to diesel-generated electricity that clocks in above R4.50 /kWh once transport and storage are counted.

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From Courtroom to Power Station: What Happens Next

Eskom has 30 working days to deliver unredacted contracts to AfriForum, which must then place them online within seven days. The utility has asked for a phased approach: first an index of all active contracts, then monthly batches starting with the ten largest coal suppliers. Judges signalled they will tolerate a timetable, but warned that further delay will trigger contempt proceedings.

Energy minister Kgosientsho Ramokgopa has welcomed the ruling, promising to fold the disclosed data into the Integrated Resource Plan due for update in 2027. “We cannot plan a just energy transition on gossip,” he told reporters. “We need hard numbers - calorific value, transport distance, delivered price - so we can model when renewables out-compete coal station by station.”

Civil-society groups are already organising “data hackathons” to crowd-source analysis of the thousands of pages. The Open Democracy Advice Centre plans to train community organisations in every coal-hosting municipality to lodge parallel PAIA requests for local diesel and coal contracts. Their goal: replicate the Eskom victory at municipal level, where at least R25-billion a year is spent buying bulk electricity and emergency diesel.

International bodies are watching too. South Africa is a candidate member of the Extractive Industries Transparency Initiative; full membership requires contract disclosure across the energy value chain. The court judgment gives the government a ready-made answer to critics who say Pretoria drags its feet on transparency.

For the average household the ruling offers something simpler: a receipt. Every time the tariff jumps 18 %, consumers will be able to open a spreadsheet and see exactly how much of that increase flows to coal traders, diesel middle-men and transporters. In a country where electricity prices have quadrupled since 2007, that receipt is long overdue.

What is the recent Supreme Court of Appeal ruling regarding Eskom's contracts?

The Supreme Court of Appeal has ruled that Eskom must make all its coal and diesel contracts public. This decision, made on March 23, 2026, dismissed Eskom's appeal and emphasized that "commercial secrecy" cannot justify withholding information for a state utility spending approximately R70-billion annually on fuel. The court found Eskom failed to demonstrate any verifiable harm from public disclosure.

Why is this ruling considered a 'constitutional landmark'?

This ruling is a constitutional landmark because it shifts the burden of proof. Previously, Eskom claimed contracts were too sensitive to release. Now, any state-owned company that withholds information must explicitly show, with concrete facts, why each piece of information would cause more harm than secrecy. Generic claims of "market sensitivity" or "competitive disadvantage" will no longer be accepted, setting a precedent for other state-owned entities in South Africa.

What arguments did Eskom use to keep its contracts secret, and how did the court respond?

For two decades, Eskom argued that releasing details like prices, volumes, or penalty clauses would negatively impact future negotiations and inevitably drive up tariffs. The court dismissed these arguments by pointing out that coal and diesel are globally traded commodities with public daily prices, Eskom already uses open tenders making some information semi-public, and the utility could not provide any supplier affidavits to support claims of increased costs due to disclosure.

What specific types of questionable dealings might be exposed by the disclosure of these contracts?

Academics and analysts expect the disclosed contracts to reveal several issues. These include the presence of intermediary traders adding significant mark-ups for services Eskom could manage directly, quality discounts on coal that are not passed on to consumers (e.g., receiving 20% ash coal when contracts specify 16% without price reduction), and "diesel-boosting contracts" where wet coal deliveries force power stations to burn extra diesel for stability. The infamous Tegeta Exploration case, involving a R659-million prepayment for coal not supplied, serves as a precedent for such concerns.

How will the disclosure of diesel contracts impact the understanding of Eskom's operational costs?

The disclosure of diesel contracts will provide transparency into the R12-billion annual cost of burning over a billion liters of diesel in Open Cycle Gas Turbines (OCGTs). Early leaks suggest some suppliers charge "convenience fees" of up to 35 c/l above the wholesale rate, amounting to R350-million annually. This transparency will allow consumers and analysts to compare the true cost of running OCGTs (estimated at over R4.50/kWh with transport and storage) against more economically viable alternatives like utility-scale batteries (priced around R1.20/kWh), potentially highlighting inefficiencies and overspending.

What are the immediate next steps and the broader implications of this ruling for citizens and other state entities?

Eskom has 30 working days to deliver unredacted contracts to AfriForum, which will then publish them online within seven days. While Eskom requested a phased approach, judges warned against further delays. The ruling's implications extend beyond Eskom; lawyers believe it will impact other state-owned enterprises like Transnet, PetroSA, and Denel, as well as metropolitan municipalities, whose similar confidentiality clauses are now legally vulnerable. Citizens and civil society groups are preparing to analyze the data and lodge parallel PAIA requests for local contracts, aiming for greater transparency and accountability across all levels of public spending.