Wed, 29 Jan 2020

When Eskom utility announced record power cuts on Monday afternoon, Impala Platinum had two hours to hoist thousands of workers from 1 kilometer deep shafts.

The deepening crisis at debt-ridden power utility shut down South Africa's key mining industry for 24 hours, hitting gold and platinum producers that had been enjoying a renaissance on the back of higher metal prices. The rolling blackouts threaten to tip South Africa's economy into recession and hobble miners already impacted by community protests and xenophobic violence.

Johannesburg-based Implats was ordered to cut electricity usage to 55 megawatts from about 300 megawatts, forcing it to reduce power to furnaces by 90% and shutting down refrigeration and compressor plants.

"It was drastic, it makes life very difficult," said Johan Theron, a spokesman for Implats. "We can't operate like this but if we don't cut the power, the national grid collapses."

Ramaphosa: 'There has been a measure of sabotage' behind power cuts

Stability Needed

Sibanye, which requires about 750 megawatts to run its platinum and gold operations, still doesn't have sufficient power, said spokesman James Wellsted. The company has been forced to postpone pumping water from underground mines or reduce ventilation to manage supplies, he said.

When platinum producers reached a wage settlement last month with union Amcu, it appeared to pave the way for them to capitalise on record palladium prices and for some to resume paying dividends next year. Now more problems are piling up.

Illtud Harri, a spokesman for Rio Tinto, didn't immediately respond to emailed queries.

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