CORRECTED-Eskom price hike to cost South Africa 90,000 mining jobs - Minerals Council

By Kitco News / March 25, 2019 / www.kitco.com / Article Link

(Corrects industry body name to Minerals Council from MinesCouncil)JOHANNESBURG, March 25 (Reuters) - South Africa's gold andplatinum mines will shed around 90,000 jobs in the next threeyears as above-inflation electricity price increases by powerutility Eskom add to already soaring operating costs, anindustry body said on Monday."In total, as many as 90,222 jobs would be at risk solely asa result of the MYPD4 tariff increases granted by Eskom," theMinerals Council South Africa said in a presentation.Job cuts are politically sensitive in Africa's mostindustrialised economy where a quarter of the labour force isunemployed, while power outages and steep price increases byEskom are set to hurt an already fragile growth outlook.In February, miner Sibanye-Stillwater said it planned to cutnearly 6,000 jobs in a restructuring of its gold miningoperations, while Gold Fields said last year it could slash1,100 jobs, and Impala Platinum plans to cut its workforce by athird. Labour unions have threatened strikes over the job cuts atmining firms as well planned reductions at a numerousstate-owned companies.


Energy regulator Nersa said in early March Eskom could hiketariffs by 9.41 percent in the 2019, 8.10 percent in 2020 and5.2 percent in 2021, far less than Eskom's request for increasesabove 15 percent in each of the three years.The industry body said in its presentation that 71 percentof all gold mines and 65 percent of platinum mines were"loss-making or marginal" by the end of 2018, adding the powerprice hike would make the situation even worse.Once the largest contributor to South Africa's grossdomestic product, mining has shrunk steadily over the lastdecade with hard-to-reach deposits, high wage settlements anduncertainty over ownership laws deterring investors against abackdrop of slack global demand.Last week, Statistics South Africa data showed goldproduction contracted for the 15th month in a row, shrinking by22.5 percent in January, while platinum output was up 8.8percent in the same period."We see the Eskom crisis as not just a crisis but a
potential disaster," said Minerals Council chief executive RogerBaxter.
(Reporting by Naledi Mashishi and Onke Ngcuka; Writing byMfuneko Toyana; Editing by MarkPotter)

Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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