Power Price Hike to Hit South African Miners

28 June 2009 (Last Updated June 28th, 2009 18:30)

The recent hike in electricity tariffs will cost the South African mining industry an additional R2bn, according to a leading lobby group representative. Chamber of Mines techno-economics assistant adviser Dick Kruger said that the hike will burden the mining companies, which are alrea

The recent hike in electricity tariffs will cost the South African mining industry an additional R2bn, according to a leading lobby group representative.

Chamber of Mines techno-economics assistant adviser Dick Kruger said that the hike will burden the mining companies, which are already affected by rising costs and decreasing commodity prices, according to a report in Mining Weekly.

The National Energy Regulator of South Africa recently accepted a proposal from the public utility company Eskom for a 31.3% interim hike in power prices from 1 July 2009 to 31 March 2010.

Kruger said that many mines are battling for survival and Eskom needs to develop a detailed funding model for its capital projects to breakdown what the funding costs are.