Debates are ongoing with discussions over a hypothetical affect of a 1% tariff hike in South Africa. The minute increase could hit the mining industry hardest, amounting to over $10 million a year in addition fees paid by the energy intensive industry, according to the South African Chamber of Mines.
Nicolette Pombo-Van Zyl, program manager of the Large Power User program at African Utility Week, said: “On the receiving end of tariff hikes, industry is dealing with three significant elements, namely the cost of electricity, uncertainty around sufficient electricity supply and carbon emission management.”
South African Chamber of Mines techno-economic adviser Dick Kruger said that while Eskom did a decent job on protecting big businesses from power cuts, there were still problems. “In March the mines in Carletonville stood still for three days when transformers burned down and miners could not be sent underground. It also happens frequently that the power supply is not running on full strength which leads to work grinding to a halt. Although the mines do not generate income during these situations, the expenses do not decrease. Workers still need to be paid and the mines have to foot the bill for the ordinary daily running costs.”
South Africa is estimated to have the world’s 5th largest mining sector in terms of GDP value, with an estimated worth of $2.5 trillion. However, this industry needs to also adapt to current times and power struggles facing the country. Many mining companies are looking into renewable energy, and with South Africa’s planned projects, renewable energy could help mitigate those rising energy costs.
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