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Eskom price hike to cost South Africa 90,000 mining jobs - Minerals Council
(Corrects industry body name to Minerals Council from Mines
JOHANNESBURG, March 25 (Reuters) - South Africa's gold and
platinum mines will shed around 90,000 jobs in the next three
years as above-inflation electricity price increases by power
utility Eskom add to already soaring operating costs, an
industry body said on Monday.
"In total, as many as 90,222 jobs would be at risk solely as
a result of the MYPD4 tariff increases granted by Eskom," the
Minerals Council South Africa said in a presentation.
Job cuts are politically sensitive in Africa's most
industrialised economy where a quarter of the labour force is
unemployed, while power outages and steep price increases by
Eskom are set to hurt an already fragile growth outlook.
In February, miner Sibanye-Stillwater said it planned to cut
nearly 6,000 jobs in a restructuring of its gold mining
operations, while Gold Fields said last year it could slash
1,100 jobs, and Impala Platinum plans to cut its workforce by a
Labour unions have threatened strikes over the job cuts at
mining firms as well planned reductions at a numerous
Energy regulator Nersa said in early March Eskom could hike
tariffs by 9.41 percent in the 2019, 8.10 percent in 2020 and
5.2 percent in 2021, far less than Eskom's request for increases
above 15 percent in each of the three years.
The industry body said in its presentation that 71 percent
of all gold mines and 65 percent of platinum mines were
"loss-making or marginal" by the end of 2018, adding the power
price hike would make the situation even worse.
Once the largest contributor to South Africa's gross
domestic product, mining has shrunk steadily over the last
decade with hard-to-reach deposits, high wage settlements and
uncertainty over ownership laws deterring investors against a
backdrop of slack global demand.
Last week, Statistics South Africa data showed gold
production contracted for the 15th month in a row, shrinking by
22.5 percent in January, while platinum output was up 8.8
percent in the same period.
"We see the Eskom crisis as not just a crisis but a
potential disaster," said Minerals Council chief executive Roger
(Reporting by Naledi Mashishi and Onke Ngcuka; Writing by
Mfuneko Toyana; Editing by MarkPotter)
First Published: 2019-03-25 14:49:36
Updated 2019-03-25 17:27:35
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