/ 30 January 2008

SA mines set to resume production

South African mining companies were set to resume production this week after power failures brought the industry to a halt last Friday.

Anglogold Ashanti said it expected all its mines would be in full production by the end of the week.

Gold Fields spokesperson Willie Jacobsz said: ”All our mines are busy mobilising as the power flow is being restored.”

De Beers Consolidated managing director David Noko said De Beers expected to resume production at most of its six mines on Tuesday.

This came after Public Enterprises Minister Alec Erwin said earlier in the day that the country’s mines should have 90% of their power back by Thursday.

”The target is on Thursday to ramp [the power for mines] to 90%,” said Erwin, briefing the media in Midrand about a meeting between government, the mining industry and Eskom.

Last Friday, most gold, platinum and diamond mines came to a halt because Eskom said it could not guarantee a stable power supply.

Erwin said 70% of power was restored by last Sunday but this was not enough for full productivity at the mines.

Mines would receive 80% of their normal supply on Tuesday, he said.

Attending the briefing with Erwin were Minerals and Energy Affairs Minister Buyelwa Sonjica, Eskom CEO Jacob Maroga, Eskom chairperson Valli Moosa, president of the South African Mines Development Association Brigitte Radebe and Chamber of Mines president Sipho Nkosi.

Difficult times

Nkosi said: ”I think this has been one of the most difficult times, not only for the mining industry but for South Africa at large”.

He said however the industry had not ”stopped planning”.

”This is a temporary situation which we are working towards resolving”.

He said the energy situation had brought home one important thing: ”As South Africans we need to use power more efficiently”.

Maroga said the power cuts to the mine had not been about Eskom ”switching off a switch”.

He said Eskom had sent a request for a reduction and a warning about unstable power supplies to mines.

Mines then shut down because of safety considerations.

Maroga said the situation on the mines was linked to coal power supply — SA had extremely low supplies of coal at the moment.

Radebe said ”we are not in the business of closing down our mines”.

”The SA industry is not coming to a halt, it is a temporary challenge. I’m very positive,” she said.

Anglogold Ashanti said it had begun the process of restarting production.

”It is anticipated that all mines will be back in full production by the end of next week,” said the company.

Surface sources might not be able to be processed in the Vaal river area because of the reduced power supply, it added. The company also said it would consider ways of increasing its energy efficiency.

Details on the operational and financial consequences of last week’s shutdown should become available when the company presents it results for the fourth quarter on February 7.

Gold Fields said bringing its mines back to full production would be a gradual exercise, but the process was already under way on Tuesday night.

De Beers said it would immediately resume production at its underground Finsch Mine; Kimberley Mines, including the operations of smaller scale contractors in the Northern Cape, and at The Oaks and Venetia Mine in Limpopo.

The company would make a decision on opening its remaining two mines following the increase in power supplies to 90% later this week.

Jabosz said Eskom had undertaken to give the industry at least four hours warning before any future interruption in the power supply.

A month of hell

Meanwhile, ordinary consumer can expect current load-shedding by Eskom to continue, if not worsen, for at least the next four weeks. The utility cautioned that this might be extended due to excessive rain.

Eskom, which met major industrial customers and the six metro mayors on Tuesday, proposed a three-phase recovery period that would include load-shedding, at least in the initial phase.

”We do foresee load-shedding,” said Erwin, adding that Eskom and the government aim to move towards a more predictable system, but in the interim there will be load-shedding and later power rationing. – Sapa