Two of South Africa’s largest trade unions have rejected an improved 6 percent salary increase offered by state-owned power utility Eskom, union representatives said on Tuesday, raising the prospect of renewed wage tensions at Africa’s biggest electricity provider.
The offer was made to the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA), following months of negotiations that began last year. NUM had initially demanded a 15 percent increase but recently lowered its request to 12 percent. Eskom had previously offered 5.5 percent.
Eskom, which has long struggled with operational and financial challenges, is seeking to conclude a multi-year wage agreement with the unions. The company has faced years of rolling blackouts and maintenance problems, which have weighed heavily on South Africa’s economy.
Improved performance at Eskom’s coal-fired power stations in recent months has reduced outages and enabled the company to post its first annual profit in eight years, according to industry sources. The utility hopes that progress on wage negotiations will support operational stability and allow it to attract and retain skilled personnel.
Union officials have indicated that the 6 percent offer does not meet members’ expectations, citing inflation and rising living costs as key factors in their wage demands. Further talks are expected in the coming weeks as both sides seek to avoid industrial action.
Eskom supplies the majority of South Africa’s electricity and is a critical player in the Southern African power grid. Any protracted dispute with unions could disrupt power supply and economic activity, analysts warn, underscoring the importance of a swift resolution.
The company’s ongoing negotiations are closely watched by investors and policymakers, given Eskom’s central role in stabilizing the nation’s energy sector and supporting economic growth.
Eskom is South Africa’s state-owned electricity utility and the largest power producer on the African continent. The company generates about 95 percent of the country’s electricity and operates a mix of coal-fired, gas, hydroelectric, and nuclear plants. Eskom has long been considered the backbone of South Africa’s energy infrastructure, supplying power to households, industries, and regional grids across Southern Africa.
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However, Eskom has faced chronic operational and financial challenges for over a decade. Aging coal-fired power stations, deferred maintenance, and underinvestment have contributed to frequent load shedding—rolling blackouts imposed to balance supply and demand. These power interruptions have had widespread economic consequences, slowing industrial output, increasing production costs, and undermining investor confidence.
Financially, Eskom has struggled with high debt, low liquidity, and costly government bailouts. The utility’s annual losses, which accumulated over years of operational inefficiency, prompted restructuring plans and tariff increases approved by regulators. While recent improvements in coal generation have allowed the company to post its first annual profit in eight years, long-term sustainability remains dependent on operational efficiency, investment in infrastructure, and prudent financial management.
Labor relations are another critical aspect of Eskom’s operations. The utility employs tens of thousands of workers, many of whom are represented by major trade unions, including the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA). Wage negotiations have historically been contentious, with strikes and labor unrest often coinciding with periods of power shortages. Workers cite inflation, living costs, and market competitiveness as drivers of higher pay demands.
The current dispute over a proposed 6 percent salary increase comes after Eskom offered 5.5 percent in January 2026 and follows NUM’s reduction of its original 15 percent demand to 12 percent. Union rejections of the offer highlight the ongoing tension between maintaining operational stability and meeting employee expectations.
Eskom’s ability to secure a multi-year wage agreement is crucial for minimizing disruption to power supply. Industrial action or prolonged negotiations could exacerbate energy shortages, affect regional trade, and place additional strain on South Africa’s economy, which relies heavily on uninterrupted electricity for mining, manufacturing, and service sectors.
The company’s challenges are compounded by the government’s efforts to restructure the energy sector, diversify energy generation, and reduce reliance on coal to meet environmental commitments. Investments in renewable energy, grid upgrades, and independent power producers are intended to complement Eskom’s generation capacity, but labor relations remain a central factor in operational continuity.
In this context, wage negotiations are not just a matter of pay but a key component of national energy security, economic stability, and the long-term viability of one of Africa’s largest state-owned enterprises.
