Mining companies could cease operations should load shedding persist

Labour expert Mamokgethi Molopyane says there is a possibility that mining companies may cease operations in the next coming years if power utility Eskom continues with load shedding.

Watch: Mining industry concerned about continued rolling black outs 

Production decline

While the mining industry is the main contributor to South Africa’s Gross Domestic Product (GDP) Molopyane says this will cause production to decline and lead to retrenchments.

The mining industry and organised labour have expressed concern at the continued load shedding.

Last year, Statistics South Africa announced that mining recorded the highest growth rate in the first quarter. According to the report, mining recorded growth of 18.1%. However, there are challenges in the sector, created by on-going power outages.

Last week, Eskom escalated load-shedding from stage four to stage six. The company blames this on the unprotected strike by workers and breakdowns at power plants.

Watch: Stage 6 rolling black outs expected for the week 

However according to Molopyane, though mines have plans in place to make sure that work is not interrupted by power outages, there is a likelihood that mining companies may restructure or close in the coming years if load-shedding persists.

Restructure operations

Molopyane explains, “Going into the coming quarters of the year we anticipate seeing companies restructuring their operations as a response the continuous load- shedding. Unfortunately people who turn to be affected the most are the actual workers, mine workers and people who rely on services the mining industry.”

Trade union National Union of Metal Workers of South Africa (NUMSA) says not only workers will be affected, sub-contractors will also feel the pinch.

NUMSA secretary in Rustenburg, Phestus Motshabi says job loses will be experienced if they are unable to supply the mines and that they will not be able to survive as they rely mainly on supplying the mines.

He adds, “So, should load shedding continue, it is going to negatively impact those contractors because they will not be able to supply the mines in that regard.”

Reduce demand

Meanwhile, one of the affected mines, Sibanye Stillwater, says it often has to reduce its electricity demands.

James Wellsted of Sibanye Stillwater elaborates, “We have agreed protocol, they require 10-15% reduction in demand and we will start implementing these different protocols that we agreed with them.  So we are able to continue operating through this period, obviously over an extended period there will be an impact on production.”

Wellsted says though there is an agreement signed with Eskom, they have to pause other production areas as stages of load-shedding escalates.