Electricity crisis burying the mining industry

JOHANNESBURG - South Africa's electricity crisis is burying the mining industry.

Production in the sector fell for the twelfth consecutive month.

It recorded a 1.9% decrease from January 2021 to January 2022.

There was some good news though, as mineral sales rose by 6.8%, year-on-year.

READ: Mining and the energy transition under scrutiny

Head of Policy Analysis at the Centre for Risk Analysis, Chris Hattingh says mining companies are taking strain as they try to navigate rolling blackouts.

He said, "if you look at data from CSIR, the trend is that we will have even more load-shedding this year....and any previously.

"How do mining companies deal with that? Some can maybe afford to go off grid, can make their own plans, that capacity takes time to build up, you can't do that overnight....that means mining activity and mining output are going to suffer and even if you get that right, you still have issues in getting your goods out of the port and using rail for example."

"Just in the past week, Transnet Ports Authority put out a notice advising consumers about possible pausing around activity at Richards Bay around the national shutdown, I do believe they retracted that statement subsequently...even that creates a sense of uncertainty and lower confidence."

"So, these things make it more difficult and make it harder for mining companies to sink that investment and capital, what they could have done before...they put out fewer volumes of their products than before and raises the risk that South Africa simply doesn't have the spending power, the tax revenue that it did before."

"Where do the spending cuts come? Maybe in an election here not as much but these things all impact on each other."