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Energy crisis
Cynthia Carrol
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HOW IT ALL STARTED:
The energy crisis predicted years ago has had unprecedented effects - plunging most parts of the country into darkness, and impacting all industries, including the resources sector, with mining houses having to halt operations and report significant production losses. Towards the end of January, Eskom called on SA's gold, platinum and diamond producers to halt production, due to the crisis.
ANGLO AMERICAN
January 29: All Anglo American coal mines resumed operation - at full production levels, accommodated by power savings at Kleinkopje, where production has been reduced.
January 30: The company announced that, following meetings with Eskom and the SA government, all of its local operations had had 80% of their electrical power restored.
February 2: Power was increased to 90%.
ANGLOGOLD ASHANTI
January 25: AngloGold Ashanti halted mining and gold recovery operations on all of its SA operations. Only underground emergency pumping work was continued.
January 29: AngloGold Ashanti commenced the process of bringing back into production all its underground mines and associated gold treatment plants. Full production commenced in the second week of February.
The company is committed to determining means of increasing energy efficiency measures in discussions with Eskom, in order to bring surface sources to account, so as to return to normal production.
ANGLO PLATINUM
January 25: Anglo Platinum and the DME commenced urgent talks to ensure that the supply of electrical power to platinum producers remains a top priority to prevent disruption to global platinum markets, as SA supplies over 75% of global platinum demand. Essential underground pumping and critical process work continued during the power outages.
GOLD FIELDS
January 25: Gold Fields reported all mining activities suspended at its SA operations. "This will have a serious effect on the SA operations and will negatively affect our gold production. The SA operations produce approximately 7000oz per day," says CEO, Ian Cockerill.
January 28: Gold Fields power supply was restored to 71% of total average consumption. 50% of Gold Fields' normal electrical consumption is required simply to pump, ventilate and refrigerate its operations.
BHP BILLITON
January 25: BHP Billiton's southern Africa operations, including its Bayside, Hillside and Mozal aluminium smelters, continued to operate, in spite of load-shedding continuing. Manganese mines in Hotazel stopped mining. The company voluntarily reduced load at Metalloys and MMC. BHP Billiton's coal mines continued to operate.
January 31: BHP Billiton began reducing power demand at the Hillside, Bayside and Mozal aluminium smelters by approximately 10%. The situation is expected to remain for the next few months. The impact on production for the current financial year ending June 30, 2008 will depend on how long the tight power supply continues.
XSTRATA
January 25: Xstrata advised that, in response to Eskom's request to reduce electricity demand to the minimum possible, it had reduced load across the Xstrata-Merafe Chrome venture ferrochrome furnaces and Xstrata's vanadium and platinum operations.
January 30: Xstrata Alloys was informed by Eskom that 80% of normal power supply would be restored to its operations, and 90% of normal power supply would be restored by February 1. The restoration of the remaining 10% is entirely dependent on the success of a nationwide recovery plan presented to major industrial and local government users. Xstrata Alloys was to work closely with Eskom to assist in the 10% national reduction in power supply. Xstrata Coal SA is participating in a working group to alleviate any coal supply issues comprising Eskom, the Chamber of Mines and the DME. The working group has agreed upon a process that aims to assist coal-fired power stations to maintain 20-day stockpiles of coal in anticipation of increased demand during the SA winter. Xstrata Coal will also co-operate with Eskom on its medium-term demand reduction strategy.
IMPALA PLATINUM
January 25: Implats withdrew the workforce and cancelled the day shift at Impala Rustenburg. Operations at Marula continued normally. The refineries in Springs were not affected. The loss caused by this stoppage is of the order of 3500ozpd platinum.
January 29: A meeting between Government, Eskom and the mining industry agreed that power availability would be restored to operations to a level of 80% within 24 hours and 90% by 2 February. This was expected to allow Implats to ramp up to normal levels of production. It is in the process of optimising operations against power allocation to achieve an overall 10% reduction as requested by Eskom.
NORTHAM PLATINUM
January 25: Northam advised that mining operations had been adversely affected by power outages over the previous two weeks, and were suspended owing to insufficient power to continue normal operations safely. This action followed limited underground activities during the morning.
ROCKWELL DIAMONDS
January 28: Rockwell Diamonds reported that power outages had taken place in SA since the start of the year as a consequence of load-shedding. In spite of the power outages, the company's mining operations at Wouterspan, Holpan and Klipdam were continuing to operate, although with interruptions.
DE BEERS CONSOLIDATED MINES (DBCM)
January 25: DBCM reduced its consumption to 'survival load', and ceased production on six mines - Venetia, Finsch, Kimberley, Cullinan, The Oaks and Namaqualand. De Beers had already been reduced to 681 GWhrs in 2007 from 707 GWhrs in 2006.
January 30: DBCM resumed production at most of its six mines. The company was to resume production immediately at its underground Finsch Mine; Kimberley mines, and at The Oaks and Venetia Mine in Limpopo Province.
HARMONY GOLD
January 25: Harmony suspended operations on all its underground mines, both morning and afternoon production shifts.
January 30: Eskom granted Harmony operations 80% power supply. The majority of the mines were working based on the strategy plan devised for an average 80% power supply. There was a varying staff complement on mines, with no production workers on some mines, 60% or only care and maintenance workers on other mines, and the rest at full complement. Harmony stopped most of the support infrastructure and some of the metallurgical mills from operating during the country's peak consumption periods. Hoisting of ore was being done between midnight and 5am.
SIMMER & JACK MINES
January 30: Operations were permitted to increase energy usage to a maximum 80% of typical load profile. Production continued at selected shafts, in line with the directive to use only 80% of the company's allotted power supply, ramping up to 90%. Underground operations at TGME remained unaffected by the power cuts, as Frankfort Mine is powered by a diesel generator.
First Uranium estimate that, for every operation day lost during the quarter ending March 31, 2008, it expects to lose an average of 888t of ore processed and approximately 170oz of gold produced. Until January 30 only three days of production time had been lost, and shaft rehabilitation had not been interrupted at all.
Randfontein Estates has suspended toll milling of ore from the Ezulwini Mine as a result of its energy usage reductions, and it is not clear when this will resume, if at all. Should Randfontein Estates' energy reduction plan cause toll milling to be suspended indefinitely, Ezulwini Mine will stockpile ore, which will then be processed when its own mill is commissioned in April. Given its relatively low power requirements, First Uranium's tailings recovery operation at Mine Waste Solutions has been unaffected by the power cuts.
MERAFE RESOURCES
January 25: Merafe reduced electricity load across all the Xstrata-Merafe Chrome Venture furnaces. Power supply to all operations was set at a maximum of 80% of normal power consumption, and power supply at all operations was expected to increase to 90% of normal power consumption on February 1.
The restoration of the remaining 10% is entirely dependent on the success of a nationwide recovery plan presented to major industrial and local government users.
AQUARIUS PLATINUM
January 25: Aquarius advised that mining operations at Kroondal, Marikana and Everest were being affected by power outages due to load-shedding requirements demanded by Eskom. Following the suspension of milling operations on January 25, a near normal supply of power returned late evening on January 29. Eskom later agreed to provide 80% of normal power on January 29, and 90% from January 31.
In addition, the Mimosa mine in Zimbabwe continued to operate normally following power interruptions in the country. Further, notification has been received from some suppliers of consumables used in the processing plants that they are experiencing manufacturing problems as a result of load-shedding.
DRDGOLD
January 25: DRDGold advised that ERPM and Blyvooruitzicht mines had limited power supply to emergency maintenance services and that underground production at these mines had been suspended.
January 31: Underground production resumed on the night shift at both ERPM and Blyvooruitzicht. Blyvoor surface operations and Crown Gold Recoveries continued to operate at full capacity during the power crisis.
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