Mines grind to a halt on power shortage
28 January 2008
A record power deficit in South Africa has forced its mineral sector to slow down dramatically. Regional production of platinum, gold, copper, cobalt - and uranium - could be seriously affected. First Uranium has announced a suspension of activity at its Ezulwini mine.
National electricity company Eskom announced on 25 January that the imbalance of supply and demand "reached an unprecedented level." The company had to shed 4000 MWe in demand by asking its group of 138 large power consumers to simply do less work because the electrical supply system was "at a very high risk" and "could have been compromised."
"This status is expected to prevail for two to four weeks," said Eskom, which wants to use a large share of nuclear power in future.
Among the companies shutting down operations was First Uranium, which all but halted its new Ezulwini uranium and gold mine. The company announced: "At this startup stage... it is estimated that for every operation day lost during the quarter ending 31 March, First Uranium would expect to lose an average of 888 tonnes of [uranium-bearing] ore processed and approximately 170 ounces of gold." Low-power shaft rehabilitation, venting, pumping and tailings recovery continued.
Other companies affected included platinum producers Angloplat and Implats which both sent workers home for the day and reduced operations to a minimum of required underground pumping and process work. Implats said the impact to their operations would be 3500 ounces of platinum per day. With current platinum prices at around $1680 per ounce after surges on supply worries, the economics of the problems are alarming. South Africa is the source of 75% of global platinum supplies.
Buyelwa Sonjica, minerals and energy minister, said: "We are aware of the strategic importance of South African platinum output." Her power supply strategy includes a large portion of nuclear power in coming decades. Under plans which are expected to be put into action soon, Eskom could build up to 12 large nuclear power reactors to provide the backbone of supply. It could also use up to 24 of the smaller Pebble Bed Modular Reactor units in the strategy which would see nuclear power provide 30% of electricity - up from 6% now.
South Africa's power troubles are also affecting its neighbours Namibia, Zimbabwe and Botswana and their copper and cobalt production rates. Power exports from South Africa to Namibia have been stopped, raising fears that uranium production in that country could also be affected.