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UPDATE 3-South African mines grind to halt as floods worsen power crisis

Tue, 10th Dec 2019 09:46

* Power crisis at state firm Eskom damaging economy

* Miners including Harmony, Impala Platinum, Sibanye hit

* Energy-intensive deep mines forced to halt production
(Adds Ramaphosa cuts short Egypt trip, paragraph 8)

By Helen Reid

JOHANNESBURG, Dec 10 (Reuters) - Mines across South Africa
are shutting down after flash flooding caused the largest power
blackouts in more than a decade, threatening a key export sector
in a further blow to the country's already slowing economy.

Heavy rains across parts of South Africa have submerged
whole neighbourhoods, leading to mass evacuations and
aggravating problems at state-owned utility Eskom, which has
been struggling to keep the lights on since 2008.

Harmony Gold, Impala Platinum, and
Sibanye-Stillwater all said they had been forced to cut
production since Monday owing to power shortages.

"There are very few underground mines that operated
overnight and will be operating normally today," said a
spokesman for the Minerals Council, an industry body.

The mining industry contributed 350.8 billion rand ($23.85
billion) to the South African economy in 2018, according to the
Minerals Council, around 7% of gross domestic product (GDP).

Eskom said on Tuesday it planned more load-shedding, a South
African term for planned power cuts, having cut up to 6,000
megawatts (MW) from the national grid on Monday after flooding
triggered failures at its Medupi coal fired plant.

President Cyril Ramaphosa cut short a state visit to Egypt
in order to meet Eskom officials, local news agency EWN said on
Tuesday. The presidency did not immediately respond to a request
for comment.

"The ongoing load shedding is devastating for the country
... causing our economy great harm and disrupting the lives of
citizens," Ramaphosa said in a statement earlier on Tuesday.
"The energy challenges in this country will not be resolved
overnight."

Eskom's chief operations officer Jan Oberholzer told the
eNCA news channel that the crisis was "manageable" with 4,000 MW
of Monday's outages attributable to the flooding.

"The outlook for this week is to maintain load shedding
because of the weather, because of the coal handling challenges
that we've got," he said.

SHUTDOWN

Harmony Gold called off its underground shifts, saying they
would resume as soon as Eskom could provide assurances the power
supply would be more reliable, while Impala Platinum stopped
production at its Rustenberg and Marula mines after it was left
functioning at 20%-30% of normal power.

It later added that losses had already amounted to 120
million rand.

"We certainly can't risk any attempt at production with this
level of power," a spokesman for the platinum miner said.

Anglo American said its operations had been
affected but gave no further details. The company mines coal,
diamonds, iron ore, and platinum in South Africa through its
businesses De Beers, Kumba Iron Ore and Anglo American
Platinum.

Sibanye-Stillwater shut all its deep-level mines on
Monday but was aiming to send miners back underground for the
afternoon shift on Tuesday at 1400 GMT.

A Gold Fields spokesman said the impact on its
South Deep mine has been 'limited' so far, but prolonged power
cuts at the current frequency would present challenges.
Petra Diamonds Ltd said on Monday it was in the
process of halting operations at its Cullinan, Finsch and
Koffiefontein mines in South Africa after Eskom asked the miner
to reduce its electricity load.

($1 = 14.7075 rand)

(Writing and additional reporting by Tim Cocks in Johannesburg.
Editing by Kirsten Donovan)

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