African Mining Circle: According to a Reuters report, two South African mining executives warned on Wednesday that South African utility company Eskom is in a difficult situation and the power supply interruption continues to increase, which may affect the mining company's investment plans.
Impala Platinum CEO Nico Muller said at the Platinum Group Metals (PGM) conference: "I think the impact of Eskom is much more pronounced than the impact of COVID-19, although COVID-19 is attracting everyone's attention."
Muller said that Eskom's power supply will have a "material impact" on future growth decisions.
Electricity in South Africa is mainly provided by Eskom. For many years, the company has struggled to manage the power supply of aging coal-fired power plants and implemented intermittent power outages, which undermined economic growth and business confidence.
The power company said in February that the possibility of power outages in the next 18 months has increased.
Natascha Viljoen, CEO of Anglo American Platinum Group Platinum also attended the meeting. He said that power supply is not the main driving factor of the company's investment decision, but it determines the willingness to invest and prevents the emergence of opportunities such as base metal beneficiation. Base metal beneficiation is a process of adding value to mined metals.
Due to the closure of mines, miners contracted the disease and South Africa’s mining industry was hit hard, but weaker local currencies and rising metal prices eased the impact of the decline in production.
Muller said: "Water and power safety play a vital role in our investment decisions."
In August of this year, the power supply was interrupted again. Last week, Eskom cut its power supply to 4,000 megawatts per day, resulting in power outages for nearly 8 hours, and the situation further deteriorated. Since then, Eskom has reduced the service interruption to a lower level.
Eskom, which is tightly funded, has weakened investor confidence. Major energy players such as miners and smelters cannot ensure the safety of power supply, forcing miners to obtain permits to generate electricity on their own.
In December of last year, some coal mines were closed during the worst power outage on record, and South Africa’s President Cyril Ramaphosa has pledged to relax regulatory restrictions on “self-production”.
