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Author: Geoff Candy
"It's a pretty tough time to be a gold miner in South Africa," says Anglo Gold Ashanti CEO Mark Cutifani. And, it is a sentiment that is being echoed by his peers at both Harmony Gold and Gold Fields.
Speaking to Mineweb, Cutifani said that not only is the company feeling a lot of pressure from the strong rand but, it is also staring down the barrel of three consecutive 45% increases in electricity tariffs.
Now, while it is well known that Eskom has requested such an increase from the country's energy regulator, the likely impact of such an increase is only now being calculated by those who would be most affected - like gold miners.
Speaking to Mineweb radio last week, Gold Fields CEO, Nick Holland, whose company uses around 580 megawatts of power, said the likely impact of such an increase in crude terms could be as much as a 17 to 20% jump in costs at a group level and around 30% for the South African operations, "That would have a very significant knock-on effect in terms of some of the more marginal operations in our group, the more marginal shafts. Heaven knows what it does to some of the production that's more expensive than we are in the gold sector. Then you've got to add on top of that the knock-on effects in terms of the impact on steel, cement, timber, you name it. So I'm very concerned about this."
Tough times ahead for power hungry SA gold mines
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