Buyelwa Sonjica,
Minerals and
Energy Minister
 
Johannesburg, South Africa — MININGREVIEW.COM — 07 March, 2008 – The Department of Minerals and Energy (DME) is expected to make a formal announcement today confirming the decision to increase the supply of power to South African mines thereby easing the production crisis that the industry has been facing for the past six weeks.

In Washington D.C. last night Minerals and Energy Minister Buyelwa Sonjica told Bloomberg Television that the country’s mines would be allowed 95 percent of their normal electricity use, up from 90%. “The situation is now under control, we have stabilised, and this will give 5% more to the mining industry,” she said.

The power curb – imposed in January following a four-year delay by the government in approving expansion plans by state power utility Eskom Holdings – left most of the country’s mines operating at 90% of their normal power use, and suffering major production losses. Several companies – among them major players such as Gold Fields and Harmony – have warned that the restrictions would slash output and destroy jobs.

“Today’s announcement would, of course, address a lot of our concerns,’” said Chamber of Mines of South Africa executive director Frans Barker in an interview with Bloomberg.

Gold Fields Limited spokesman Andrew Davidson said any increase in power would be most welcome. “It would go a long way toward mitigating job losses,” he added.

“We are speaking to the mines, we are speaking to all the sectors,” said minister Sonjica, “and we are not anticipating any job losses.’”

South Africa’s unemployment rate of 25.5 percent is the highest of 64 countries monitored by Bloomberg. The mining industry employs about 458 600 people in South Africa, with 71 percent of those working at platinum and gold mines.