Chamber Of Mines expresses appreciation at Nersa’s decision on Eskom’s tariff increase application
The Chamber of Mines of South Africa today expressed its appreciation of the decision by the National Energy Regulator of South Africa (NERSA) to contain Eskom Tariff increases to 24.8% for 2010-2011, 25.8 by 2011-2012 and 25.9% for 2012-2013.
The Chamber noted that electricity in the large scale underground mines, such as gold and platinum mines, is a substantial operatingcost and a vital ingredient to providing a sustainable environment for mining activity (especially at the health and safety levels) and for processing activities. While preliminary modeling work by the Chamber, based on surveys of members and on industry analysis, show that the proposed electricity price increases will affect different mining and smelting operations differently the tariff increase permission granted would be much more manageable and cause much less damage than a 35% increase per annum over the same period, as proposed by Eskom in its application would.
In its presentation to NERSA’s Public hearings in January 2010, the Chamber of Mines had recommended a 25% per annum increase over three years noting that such an increase would also be congruent with the NEDLAC Energy Summit agreement and the NERSA indicated price increases given in the interim 2009 NERSA pronouncement.
Higher electricity prices increase operating costs for mines. This translates into a smaller portion of the mineral resource base being economically recoverable as the marginal ores become uneconomic to mine and are therefore effectively sterilized. While the tariff increase granted by NERSA would make the situation more manageable for mining companies and have a lesser impact on employment, production and GDP, it will still impact on mining costs. Mines will still have to implement measures to deal with the impact of the increased costs.
For any enquiries related to this media statement please contact:
Jabu Maphalala
Deputy Communications Adviser
Chamber of Mines of South Africa
Tel No. +27 11 498 7212
Cell No. +27 71 679 2770
Mr Dick Kruger
Assistant Adviser: Techno Economics
Chamber of Mines of South Africa
Tel No. +27 11 498 7275
Cell No. + 27 82 569 4417 |
