Several platinum mines blame woeful production on Eskom

Studies from South Africa’s (Council for Scientific and Industrial Research) CSIR have revealed that in 2021, the duration of loadshedding added up to 48 days, while 2022 climbed to an exponential 141 days.

While Eskom has openly warned of the increased duration of loadshedding at higher frequencies, the South African mining industry may need to gear up for hard times.

When South Africa’s power utility Eskom introduced loadshedding in 2007, it fell on deaf ears. Today, no one can deny the detrimental effects that the country’s energy crisis has had on all fronts. According to the World Platinum Investment Council report in November, platinum will hit a 303 koz deficit this year, partly owing to Eskom loadshedding which impedes output of refined, saleable metal.

Several South African platinum mines (Anglo American Platinum (Amplats), Impala Platinum (Implats) Sibanye-Stillwater and Royal Bafokeng Platinum) have blamed their production underperformance, in part, on Eskom-related power cuts.

In addition to the steadily decreasing grades in platinum, miners such as Anglo American Platinum have indicated load curtailments issues attributed to the persistent power cuts. Precious metals consultant Dr. David Davis said in a an Auctus Metal Portfolios report that as an intensive energy user, a company such as Anglo American Platinum operates on the basis of load curtailment rather than timed power cuts as per nonindustrial load-shedding requirements.

Stage 4 loadshedding requires a load curtailment of about 20% in terms of National Energy Regulator of SA regulations. At higher levels of loadshedding intensive energy users are required to cut essential operations which include refining or saleable production.

Furthermore, the recycling of PGMs would become increasingly important to the fortunes of the precious metals as primary supply is unlikely to increase, says CEO of Tharisa Phoevos Pouroulis.

“The complex operating environment in the major producing region South Africa, which has had to deal with inflationary pressures and erratic electricity supply, does mean that the supply side will remain constrained for some time”.

While the country is endowed with precious metals that run across the Merensky and UG2 reefs, it may be important to note that even Eskom’s emergency power generated from open cycle diesel fueled gas turbines will not be available for the next four months, further heightening the risk of a system collapse. It is has now become necessary to release the life raft, for the sink has begun.

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