SA gold mines hit badly as power cut continues

JOHANNESBURG: South Africa’s gold mines enter their fourth day with power cuts preventing all major underground works as each day's loss of production costing the sector huge amounts.

According to analysts each day, the sector loses R193m. Meanwhile a task team set up at the weekend including representatives of mining, labour, government and Eskom agreed to restore 70% of the mines' normal power needs by Monday.

Gold Fields spokesman Willie Jacobsz said the task team would work out what the 10% cut in power that the mining industry had been asked to implement would mean for the industry and how it could be achieved.

Mining accounts for about 15% of SA's electricity demand.The mining shutdown could have huge implications for economic growth.

The shutdown has hit the JSE hard, with the gold mining index dropping 6% on Friday after news that SA's big mines had suspended underground operations.

However, gold surged to a new record of $924/oz and platinum peaked at a new high of $1694/oz, reflecting investors' anticipation of a shortage of the metals, of which SA is one of the biggest global producers.

SA's mining sector employs about 460000 people but indirectly supports about 5-million. The big mining groups, including Anglo Platinum, Impala Platinum, Northam Platinum, Lonmin, Gold Fields, Harmony Gold, De Beers and Merafe Resources, have reported a halt to some or all activities, while the smaller groups continue to operate.