Xstrata, BHP and Anglo American risk South Africa electricity rolling black-outs

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

Reply New Message

Prev Message Back To Forum Threaded View Next Message

Latenite

Rank: President [?]

Points: 4621 [?]

Votes: 186 Score: 3.4 [?]

Your Vote:

Please Log In to Vote

Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

Xstrata, BHP and Anglo American risk South Africa electricity rolling black-outs

posted on Dec 02, 2009 09:18PM

By Ron Derby

Dec. 2 (Bloomberg) -- South Africa may face rolling black- outs, known as load-shedding, in 2011 and 2012 as the electricity system becomes “vulnerable” because of increased demand, Eskom Holdings Ltd. said.

In those years the gap between generation capacity and demand will narrow “below comfortable levels, leaving the system vulnerable to worse than expected plant performance and higher than planned for demand,” the state-owned utility said in an e-mailed response to questions today. “This increases the risk of load-shedding.”

Eskom yesterday asked for regulatory approval to increase electricity tariffs by 35 percent a year for the next three years to reduce an 80 billion rand ($10.9 billion) funding gap in its five-year, 385 billion-rand expansion plan.

The utility stopped supplying power to many of South Africa’s mines and smelters for five days in January 2008 as it struggled to meet demand in Africa’s biggest economy.

“A worse-than-planned generation performance will result in higher risk and reduce system adequacy, especially during 2011 and 2013,” said Eskom, which supplies about 95 percent of South Africa’s power.

Eskom expects the first unit of its 4,764-megawatt Medupi coal-fired power plant to be operational by April 2012, which will ease capacity constraints.

Electricity demand in South Africa declined earlier this year as mines and smelters, amongst the country’s largest users, cut production as South Africa’s economy slid into its first recession in 17 years amid a global economic slowdown. The country’s economy came out of recession in the third quarter, according to Statistics South Africa.

Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc are among companies that own assets in South Africa, the world’s third-largest gold miner and the largest source of coal for European power plants. The country is also the world’s biggest producer of platinum, chrome, vanadium and manganese.

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net