Electricity price rises will devastate gold sector, Sibanye warns
Sibanye is already considering cutting more than 6,000 jobs at unprofitable gold shafts amid a four-month wage strike by thousands of workers
Sibanye-Stillwater says the double-digit electricity price increase undermines the viability of the country’s gold industry. The power regulator on Thursday approved an effective 13.8% hike in tariffs by state-owned utility Eskom. That’s higher than the 9% increase planned for by Sibanye, said James Wellsted, a spokesperson for SA’s biggest gold producer. “These kind of increases, well above inflation, pose a risk to the sustainability of the industry and to job creation,” Wellsted said. Sibanye is already considering cutting more than 6,000 jobs at unprofitable gold shafts amid a four-month wage strike by thousands of workers. The new electricity charges will accelerate job losses at “energy-intensive mines”, according to the Minerals Council SA, which represents most producers.
With electricity accounting for 15% to 18% of gold producers’ cash operating costs, the new tariff means SA miners will remain marginal compared with their global peers, Morgan Stanley analysts, inclu...
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