Johannesburg - A week after they ground to a halt for lack of electricity at an estimated cost of nearly 200 million rand (27 million dollars) a day, South Africa's mines were struggling on a new, cut-power regimen and warning of job losses. On January 25, production at the country's biggest gold, diamond and platinum mines screeched to a halt after beleaguered state electricity supplier Eskom warned it could not guarantee their power supply.
After five days with just enough power to undertake essential maintenance work but no production Eskom has been increasing power to the mines over the past three days in 10 per cent increments.
By Friday the mining companies had recovered 90 per cent of their previous power supply - or what now passes for full supply after Eskom ordered them to cut their consumption by 10 per cent - and were ramping up production.
But several companies have warned that they cannot operate as normal without more power, raising fears of job cuts.
Solidarity trade union reported Harmony, the world's fifth-largest gold producer which employs around 43,000 people, was planning to cut up to 5,000 jobs and the fourth-largest Gold Fields, as many as 10,000.
While denying imminent plans to cut jobs Gold Fields spokesman Willie Jacobsz said: "If there is a sustained decline in production there will be a commensurate decline in employment.
In gold mining a 10-per-cent power cut meant a 20-per-cent cut in production, he said, adding that the decision on whether to cut jobs would depend on how long the rationing measures would be in place.
Harmony said in a statement it had agreed with unions to increase the value of an existing voluntary retirement scheme by 10,000 rand but did not comment on the report of impending job losses.
Blackouts lasting hours at a time have wrought chaos across South Africa over the past three weeks as Eskom struggles to reconcile growing demand with stagnant supply.
Government has said its wants a 10-per-cent across-the-board cut in demand and has announced four more weeks of loadshedding - cutting power to some areas when supply is short, often without warning - followed by four months of rationing.
In an effort to ease the burden of the blackouts on residential and small business users Eskom turned its attentions to the notoriously power-hungry mines last week.
Mining accounts for less than 6 per cent of gross domestic product (GDP) but over 15 per cent of electricity usage. However, mining also directly employs around 450,000 people and accounts for a sizeable proportion of export earnings.
Based on last year's figures for the three months ending October, the power outages are costing South Africa close to 200 million rand a day in lost mineral sales.
The energy crisis has led most economists to revise their growth estimates for 2008 from 4-4.5 per cent to maximum 4 per cent. Growth in 2007 is estimated at just under 5 per cent.
