The Minerals Council South Africa would prefer a private sector investor to manage a proposed energy company.
At the African Mining Indaba on Monday, Mineral Resources and Energy Minister Gwede Mantashe announced government would be talking to investors to start an energy generation company outside of Eskom.
Mantashe said the envisioned power-generating company could likely use gas to produce energy.
He wanted investors on board to help fund the ambitious move.
Mantashe emphasised that such an entity would open up the market and could lead to a drop in electricity costs.
Chief economist at the Minerals Council South Africa, Henk Langenhoven, welcomed a more competitive environment in the energy sector.
“Whether the plan or concept, as one of his advisers said, we would have loved it to be a private investor. Institutions are very welcomed.”
The council was also in favour of mining companies being allowed to generate their own power.