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Miningmx reports that while Eskom loadshedding hurts all mining activity in SA, it’s the marginal businesses such as gold mining where the damage is the greatest.
That’s the view of analysts, who reckon that gold miners with depleting resources are most affected. SA’s gold mines are deeper, labour intensive, and therefore more expensive to run. James Wellsted, spokesman for Sibanye-Stillwater which mines gold and platinum group metals (PGMs), says curtailments have the effect of lowering volumes which is “a kicker to unit costs” and speeds up closures. “Prolonged stage 4 loadshedding isn’t something we ordinarily expected,” said Jared Coetzer, spokesman for Harmony Gold. “We can management intermittent (cuts) but it will be tricky to manage a permanent cut in demand.” For PGMs, the negative impact of loadshedding might be “over-emphasised” as there was “no evidence of declining grid consumption” in the PGM sector, UBS analyst Steven Friedman noted. “We can only assume that they either have sufficient flexibility with their baseload capacity to offset the negative impact of loadshedding or the curtailments have not been severe.” He said. Still, PGM production will be further compromised by loadshedding if it continues at its current clip. Of the PGM miners, Royal Bafokeng Platinum, Sibanye-Stillwater and Northam Platinum are the most vulnerable as they have about 90% reliance for their energy on the national grid. Anglo American Platinum and Impala Platinum have 70% exposure to Eskom.
- Read the full original of the report in the above regard by David McKay at Miningmx
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