South African power crisis shuts the big mines

Hundreds of thousands of South African precious metals ounces are at risk as the ongoing power problems in the country have come to a very serious state. Electricity supplier Escom no longer has sufficient capacity to meet demand and is having to make cutbacks and reduce its exports of electricity to neighbouring countries. Mineweb reports that gold miners Anglogold Ashanti, Gold Fields and Harmony and platinum miners Anglo Platinum and Impala have all had to to shut down their operations until power supplies can be guaranteed. These are BIG producers and their closure, and that of others that will have to follow, will cost millions of dollars of lost precious metals production over a week.

Gold Fields reported early this morning that all mining activities have been suspended at its South African operations. “This is due to Eskom requesting their Key Industrial Consumers (KIC) of which Gold Fields is one, to reduce its consumption to the minimum load possible. This communication was received yesterday evening. A decision was taken to put no shifts down last night and no shifts were put down this morning.”

Eskom has indicated that “KIC loads will be reduced to ‘survival levels’ or switched out totally for the next two to four weeks.” AngloGold Ashanti says that it has ben told by Eskom, that “the current situation arises from reduced generating capacity aggravated by problems associated with coal supplies to power stations caused by unusually heavy rainfall.”

“This will have a serious effect on the South African operations and will negatively affect our gold production. The South African Operations produce approximately 7,000 oz/d. We are looking at ways to continue operations and will work closely with Eskom to try and resolve this problem” said Ian Cockerill, Chief Executive Officer of Gold Fields.