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SA wants to shelter miners in power crisis
Troye Lund
Posted: Thu, 08 May 2008
[miningmx.com] -- IT is important to keep South Africa's mines at their highest possible production levels, which means reducing their power consumption from current levels is not an option, Public Enterprises Minister Alec Erwin said on Thursday.
The country’s top ten users of electricity as well as industry as a whole were doing well to reduce their consumption by 10% as required to give Eskom enough margin not to have to use scheduled load shedding, Erwin said.
Power utility Eskom declared force majeure on its electricity supplies, forcing mines to shut down for a week. Power was subsequently restored to 80% and then 90%, with some having access to 95% of their normal consumption.
Concerns have been raised in some quarters that power consumption by households surges during winter months and this could result in blackouts if Eskom cannot meet demand.
Erwin pointed out sudden bouts of cold weather may necessitate emergency load shedding or blackouts.
Smelters in South Africa had reduced consumption. The most high profile example was BHP Billiton, which said it would cut aluminium production by 120,000 tonnes and cut hundreds of jobs to meet the 10% reduction target.
Eskom is pushing hard for a massive price increase of 60% to fund its capacity
expansion plans, which includes de-mothballing old power plants and building new ones.
Erwin said no plan has yet been hammered out between the government and the central bank which is keen to find solutions to electricity tariffs that will not put further pressure on inflation, which sits well north of the target band of three to six percent.
An electricity summit due to be held on May 16 will come up with a way around the problem, he said.
“The price increase is necessary to recover rising costs of primary energy. We have been evaluating the options and hope that we will be able to reach a common understanding at the summit for increasing prices so that the impact on the poor is minimised,” said Erwin.
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