| |
Anglo Platinum's output halted
Allan Seccombe
Posted: Tue, 29 Jan 2008
[miningmx.com] -- THE world’s largest platinum producer Anglo Platinum has halted all production, making it the worst affected division within Anglo American’s stable of South African operations grappling with power shortages affecting the entire economy.
State power utility Eskom on 25 January declared force majeure over its ability to supply electricity to mining companies and other large industrial users. Mining companies ceased production.
Since then, Eskom has provided limited power, ranging from 50 to 75% of what mining companies use on average, to ensure operations are kept safe and dry.
Anglo Platinum, which its underground mines, has halted production.
“All process operations remain on standby and no refined metals are being produced,” Anglo American, the 75.4% owner of Anglo Platinum, said in a statement.
Anglo CEO Cynthia Carroll flew to
South Africa to hold emergency talks with government and Eskom officials about resolving the crisis.
Anglo Platinum has already advised the market that its production for 2007 will be 400,000 oz lower than it had forecast, mainly because of safety issues at its operations. The latest impact on production falls in the 2008 year.
Anglo Platinum said in November it would produce 150,000 oz less
refined platinum than the already reduced 2.6 to 2.65 million oz target it set in July this year. It said in July it had lowered its targets for the year from between 2.8 million and 2.9 million oz because of the safety drive to around 2.6 million oz.
Anglo Platinum now expects to produce between 2.45 million and 2.5 million oz in 2007 because of the focus on improving safety, strikes and a lack of skilled labour.
Platinum prices have rocketed to record levels over concerns about supply from South Africa, which has not met forecast targets, pushing the market back into a narrow deficit. The latest news about production halted because of a lack of electricity has spurred prices higher.
Impala Rustenburg is losing 3,500 oz of platinum a day and its Refining Services is receiving reduced concentrate flows from suppliers who are also feeling the power squeeze, Impala Platinum said on Monday.
It is not clear when full production will be resumed at
South African mines. The impact is felt across all commodities, with only coal production appearing largely unscathed.
South Africa generates more than 90% of its energy from coal. Eskom has said wet coal, diminished stockpiles and unscheduled maintenance lies behind its problems.
“In its position as South Africa's largest mining company and both a major supplier to and customer of Eskom, Anglo American is working with Eskom, the South African government… to urgently identify and implement solutions for the short and long term to guarantee the integrity of electricity supply,” Anglo said.
Eskom, the government and industry are holding talks today (Tuesday) to find ways for reduced power consumption and establishing more reliable electricity supply. Eskom and mining companies have agreed to a 10% reduction in power offtake, while Eskom will give companies four hours notice of supply disruption.
Anglo American has formed an energy task team to
address the critical issues and meetings with the ministerial committee charged with resolving the power emergency have taken place.
At Kumba Iron Ore, South Africa’s largest iron ore producer, there has been a “relatively small” impact on output, Anglo said. There is limited production at Namakwa Sands and no production at Black Mountain operations. The Skorpion zinc operation is running on reduced power.
| |
0% 
