90 000 jobs in minerals sector in peril as power costs escalate

Solar power could be the saving grace of South Africa’s mining sector, a bedrock contributor to the country’s economy – and a sector that risks losing 90 000 jobs if Eskom proceeds with plans to levy punishing tariffs on a foundation industry that urgently requires alternatives to state-supplied power.

That’s according to Nick Holland, CEO of Gold Fields, who has said that at the end of Eskom’s current tariff-hiking cycle in 2021, the bloodletting in the minerals sector will result in severe job losses, most of it in gold mining.

Such has been the impact of Eskom price increases, with tariff hikes for industries having gone up 523% since 2006, that government must urgently approve the necessary licences for the roll-out of large-scale solar projects, Holland said.

Chief economist Henk Langenhoven of South Africa’s Minerals Council has since stated that since last year electricity tariffs have gone up 30% for economic foundation industries.

He added that if the hikes went ahead only two gold mines would most likely survive.

And although Langenhoven didn’t say which mines stood to cushion the impact of rising electricity costs, Holland indicated that Gold Fields’ South Deep mine would most probably be one of the casualties.

He stressed that cost pressures could double their electricity bill to around R1 billion over the next five years.

Without energy alternatives, he said, it’s simply “not a sustainable solution”.

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