/ 26 August 2008

Anglo American counts cost of doing business in SA

Mining and natural resource group Anglo American was mining at risk because of an insecure power supply, the group said on Tuesday.

”Eskom is unable to guarantee a secure electricity supply — so we are mining at risk,” said Ian Morison, head of engineering at the group’s technical division in South Africa.

He was addressing a conference in Johannesburg entitled A Constructive Response to the Power Crisis from the Mining and Metallurgical Industry.

”We are providing emergency generators to all our sites so that we can hoist workers from mines in the prescribed time,” he said.

”We’ve bought large generators, hundreds of them, and of course this has a fuel requirement — but this is what we’re doing to minimise the risk.”

Morison said seven months had passed since the power crunch on January 24 2008 and many stakeholders had been unaware of the impending crisis.

The issue was whether or not the relevant parties were doing everything in their power to fast-track the energy solutions that the country needed.

”I don’t think they are,” Morison said.

Progress was being hampered by capacity constraints for many stakeholders, including industry, government ministries, the National Energy Regulator of South Africa and equipment manufacturers.

”There is also inadequate cooperation between government ministries as well as with industry and there are leadership problems at many levels.”

Morison pointed out that mining was ”absolutely reliant on continuous, adequate, reliable and secure electrical power for safe and healthy access to the working place”.

Deep-level hard-rock mining was dependent on power for ventilation, cooling, pumping and the transport of miners. He said underground coal mining was dependant on power for ventilation to ensure against the build-up of methane and coal dust.

Anglo American was a founder signatory to the Department of Mineral and Energy Affairs’s energy accord and was committed to using all forms of energy efficiently.

”The accord calls for voluntary 15% energy saving within ten years but the progress is slow — it’s complicated by complex mining conditions such as increasing depth, and this requires additional energy to produce the same tonnages,” Morison said.

Turning to Eskom’s coal-supply situation, he said the situation had improved ”significantly” since April with the average coal supply now at 25,9 days on August 5. – Sapa