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South Africa industry group warns energy minister of reduced mine output

JOHANNESBURG (Reuters) – A South African industry group has told the country’s energy minister that further power constraints would lead to reduced mine output and plant closures, according to minutes from the meeting seen by Reuters.

The meeting, which took place on Tuesday, was between Energy Minister Tina Joemat-Pettersson and members of the Energy Intensive User Group (EIUG), an industry body that includes major mining companies operating in South Africa such as AngloGold Ashanti and BHP Billiton.

The ministry noted the meeting in a statement on Tuesday but provided few details about it.

South Africa is currently facing its worst power crisis since 2008, when rolling power outages cost the mining industry in the world’s top platinum producer billions of dollars in lost output and brought misery to retailers and households.

South Africa‘s state-run power utility Eskom [ESCJ.UL] last Friday implemented rolling blackouts in some parts of the country, the first such power cuts this year, and has warned that more are certain as demand threatens to outstrip its capacity to keep the lights on.

Minutes from Tuesday’s meeting obtained by Reuters show the minister indicated that she was exploring the idea of getting the private sector to reboot power plants mothballed in the past, such as those owned by local municipalities.

On the subject of Eskom‘s precarious financial situation, she was quoted as saying that the utility was “burning cash faster than it is making it” and that the company needed to rein in costs.

Even with a 20 billion rand ($1.7 billion) cash injection from the government and permission to raise electricity tariffs, Eskom has said it needs more funds to ensure liquidity.

The minister also said the high cost of diesel to run Eskom‘s open cycle gas turbines was unsustainable.

An Eskom spokesman said last week that if the cash-strapped utility was unable to purchase diesel supplies, it would lose 5 percent of its capacity and blackouts would then occur on an almost daily basis until the end of March.

Controlled power cuts are used to prevent a total collapse of the grid.

Source: Reuters Africa


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New laws will streamline SA mining

A new system aimed at improving the competitiveness of South Africa’s mining sector came into effect on Monday, 8 December, the departments of Mineral Resources and Environmental Affairs said in a joint statement.

The One Environmental System is aimed at streamlining licensing processes for mining, environmental authorisations and water use.

It represents the “government’s commitment to improve the ease of doing business and further enhance South Africa’s global competitiveness as a mining investment jurisdiction,” the statement said. Under the system, the minister of mineral resources will be responsible for issuing environmental authorisations and waste management licences for mining and related activities.

Environmental Affairs Minister Edna Molewa will be the appeal authority for these authorisations. The National Environmental Management Laws Amendment Act, known as Nemla 3, is part of a suite of Acts that form the One Environmental System.

While passed in September, it was only implemented from 8 December to ensure all complementary legislation, including certain sections of the Minerals and Petroleum Resources Development Amendment Act (MPRDA), were in place.

Permits will now be issued simultaneously by environmental affairs, mineral resources and water and sanitation within a fixed time frame – a maximum of 300 days.

If a decision is appealed, an additional 90 days will be granted to finalise the process. “Until all the legislative amendments have been effected to formalise these timeframes, the timeframes stipulated in [the he National Environmental Management Act] Nema will be applicable,” the statement said.
Until the regulations regarding residue stockpiles and residue deposits as well as the financial provision for rehabilitation regulations are finalised, the MPRDA regulations remain in force.

Minister of Mineral Resources Ngoako Ramatlhodi can now appoint mineral resource inspectors, who will have the same powers as environmental management inspectors to enforce the provisions of the National Environmental Management Act.
The system was first announced by President Jacob Zuma in his State of the Nation address in February.

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