Mark Cutifani, AngloGold Ashanti, CEO
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Eskom sets mines 10% reduction target

Posted: Sun, 27 Jan 2008

[miningmx.com] -- ESKOM, the South African power utility, has asked South Africa's mines to reduce energy consumption by 10% in return for which it would provide the industry with uninterrupted power.

In the meantime, South Africa's mines had not yet resumed production; nor were they expected to until Wednesday after meetings between Eskom and the mining and other industries were complete.

However, AngloGold and Harmony Gold both said they had sent teams underground to "make safe" their mines.

Harmony Gold said it had been supplied with about 75% of its normal power supply in order to secure its mines. It would only resume production once 90% of full power was supplied to it. Both it and AngloGold said this could be achieved without compromising the safety of its mines.

"Harmony is presently strategising on how best to optimise our plants and operations with the amount of power we will be supplied," it said in a statement. "Harmony’s nightshift will go underground tonight and tomorrow to commence with making areas safe to resume production as soon as we are supplied with 90% energy."

As part of this agreement, Eskom said it would provide the mining companies with four hours notice before cutting power to their operations.

Said AngloGold Ashanti CEO, Mark Cutifani: "The company is anticipating a ramp up in additional power later in the week that should enable a phased return to normal mining operations."

In terms of a plan to reduce power consumption 10%, Cutifani said AngloGold and Eskom had already improved power efficiency by 18% since 2004.

"AngloGold Ashanti is confident that ... the 10% reduction target set at yesterday’s meeting can be achieved without necessarily affecting workplace safety or production."

Dick Kruger, who is representing the Chamber of Mines of SA at meetings with Eskom throughout the weekend said any opportunity to secure the safety of the mines would be "highly appreciated".

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Asked whether other mines had resumed production, Kruger said: "Not as far as I know". "It's imperative the guys get back underground even on a limited basis because a lot can change underground."

“I think that we are starting to emerge from a crisis that had the potential to undermine the viability of the South African gold industry," said Cutifani. He added it was not yet possible to say how long it would take the group's seven mines to begin production again.