Eastern Platinum is in a better position than most to deal with the problems posed by the South African power shortage, it has been claimed.

According to the firm's Chief Executive Officer, Ian Rozier, although energy costs will be a struggle for the industry, Eastern Platinum's size puts it in a good position compared to larger companies.

Eastern Platinum produces 3MW of its own power - costing roughly the same at the 16MW it buys from Eskom - and the firm is reported to be considering an additional 3MW of its own power on top of this.

"I think we will continue to pick up more on the commodity prices than it will cost us to generate power," Mr Rozier explained.

Larger mines have seen their power needs cut by ten per cent since January with gradual increases in supply improving as Eskom begins to work on the problems.

The energy supplier has asked for a 60 per cent increase in power tariffs which would have a major cost on the mining industry.

But Ian Cockerill, the Chief Executive Officer of Gold Fields, believes the situation is beginning to stabilise.

Mr Cockerill, who is due to leave the firm, told a teleconference: "In South Africa, 11 per cent to 12 per cent of our costs are related to power, so if you have a 60 per cent increase in a fairly significant cost component, obviously its going to have a major impact.

"The kneejerk reaction is that the sky will fall. But this industry, and this company, has always shown itself as being very adept at evolving itself or transforming itself and dealing with these types of exogenous shocks," he explained.

Source:

Sky won’t fall on SA mining if Eskom is granted 60per cent, says Cockerill, 01/04/08
http://www.miningweekly.co.za/article.php?a_id=130189

Eastplats in better position than most to deal with power crunch – Rozier, 31/03/08
http://www.miningweekly.co.za/article.php?a_id=130178

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