Amplats, Harmony say power cuts threaten output

Amplats, Harmony say power cuts threaten output

2015-02-09 20:00

Johannesburg - Anglo American Platinum [JSE:AMS] and Harmony Gold [JSE:HAR] said they will see production losses should Eskom persist with power cuts.

While Amplats can mitigate the effect of cuts by doing maintenance on refineries and concentrators until April, it will suffer output losses thereafter, Chief Executive Officer Chris Griffith said in an interview on Monday.

Harmony lost about 50kg, or 1 600 troy ounces, of production worth R23m during the three months through December, it said on Monday.

“For the first four months of the year, what I’m seeing now I can manage with, but if that goes into the next part of the year I’m in trouble,” Griffith said.

“It is not possible not to have impact if you see this kind of load-shedding for the rest of the year,” he said, referring to the rotational blackouts imposed by the state-owned power supplier.

Large industrial users such as Harmony and Amplats are required to cut electricity consumption by as much as 20% when Eskom rations power.

The utility started a seventh consecutive day of rolling blackouts on Monday due to a shortage of capacity, it said on its Twitter account.

Offpeak Operations

Amplats reduces demand at its concentrators and refineries when Eskom asks it to lower consumption, Griffith said. The output of raw material from the company’s mines isn’t affected, he said.

“What we see is a backup of concentrate ahead of the smelter,” Griffith said. “As long as we’ve got decent enough runs after that, we can usually catch up.”

Harmony, the country’s third-biggest producer of bullion, shifted energy-intensive activities such as hoisting ore from its shafts to off-peak hours and amassed stockpiles of gold- bearing material by shutting its mills, which crush rock, during shortages, CEO Graham Briggs said.

The outlook for power constraints is “even worse” in the current quarter, he said.

“We’re big power users and when we have to switch the lifts off, we can’t get around that,” Briggs said in an interview. “It’s a crazy way to do business.”

Eskom said 37% of its installed generating capacity of 41 995 megawatts was offline last Thursday, the most since it started providing twice-weekly data in January 2012.

Of that, unforeseen plant breakdowns comprised 10 424 megawatts, or more than its two biggest facilities are able to provide, while maintenance accounted for 5 043 megawatts.

CHECK OUT: News24's load shedding planner



  • Made Inthe South - 2015-02-09 20:20

    Off course it will.Proudly brought to you by You Know Who

      Johan Arno Cilliers - 2015-02-09 21:33

      Yes but remember,they've got a good story to tell

      lacrimosewolf - 2015-02-09 21:49

      Sjoe, imagine when all those govt grants fail to deeee liver.

  • sello.molefi.33 - 2015-02-09 20:24

    I thought these big corporations paid Eskom the big bucks yearly so that they are exempt from power cuts, or not?

      lacrimosewolf - 2015-02-09 21:51

      At one point they did. Then Eskom had to pay them to stop producing Apparently this is how we are fixing the past

  • john.denmarku - 2015-02-09 20:48

    And, incompetent and thieving Jacob Zuma as President, threatens SA's entire Economy.

  • Paul Pretorius - 2015-02-09 21:01

    A 37% loss of normal capacity! We have a bunch of morons in charge. What happens when SAA stop maintaining their aircraft? Not impossible given the chaos in that parastatal.

  • Abizou Walkeen - 2015-02-09 21:02

    So what? This is apartheid's fault and Jan van Riebeeck's.

  • Hell Gate - 2015-02-09 21:03

    Existing companies will dis-invest from SA. Potential new investors will go elsewhere. Fewer jobs. More unemployment. Less tax collection. More crime. Increase in social grants. Xenephobia will worsen. Water shortages will increase . Electricity grid will collapse the economy. JZ & ANc will blame apartheid. 62% will blame the Tokoloshi......

      Hennie de Ruyter - 2015-02-10 07:53

      We are already there

  • Zelda Bothma Jacobs - 2015-02-09 21:16

    Can we get competent people to swing things around at Eksdom or are people being appointed based on race and political connections ?

      Pieter Calitz - 2015-02-09 21:45

      No and yes

  • David Broadfoot - 2015-02-09 21:43

    And this is only the Tip of the Iceberg starting to show . :-(.

  • lacrimosewolf - 2015-02-09 21:58

    Shoulda seen MAC on Twitter last night, accusing cowntries of being 'incapable of accepting an Efficient African Economy" Deluded, clinging to their ancient paradigms FACT - even by 1987, SA's economy had run out of steam. Every Where in the Wurld had mechanised. The entire Freedom Chatter is based on the mega-workforce paradigm. They took control of an economy already beyond their control - and their wild imgaginings. Today everyone cries labour, whilst the future cries Robots and mechanisation. Again, Southern Africa will be colonised or annihilated by their spectacular lack of imagination

      Joseph Shange - 2015-02-09 22:10

      This is my biggest fear, that in 75 years from now Africa will be colonized again by terminators. South Africa will be the last stand for the human race as the rest of the world will be run by robots.

      Ian Trenor - 2015-02-09 22:49

      Mac the propoganda spin artist

      lacrimosewolf - 2015-02-09 22:59

      @Joseph Shange - you are generous with 75 years. Moore's Law never falters. Whilst our erstwhile President and Mac try to cast about for a labour-centric economy already out of date in world terms from the late 60's. South Africa has always been a few steps out of time. The world imagined the ANC would bring it into sine. Yet here JZ is, following in the hoof-prints of Robert Mugabe - still imagining a labour-centric economy is economically feasible Or Humane.

  • Stabiso Minyani - 2015-02-10 07:31

    Ach well just load shed 20000 jobs or close up shop that's what I have to do soon.

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