Junior miners have been forced to shut their operations hit by double whammy of Eskom, Transnet woes
SOME JUNIOR minors operating in South Africa have been forced to close their mines as the double whammy of woes by State-owned Transnet and Eskom has hit profit and led to insurmountable logistics challenges.
The Minerals Council hosted a webinar on Friday where industry players discussed the experiences that junior minors have had due to load shedding and Transnet's lack of locomotives.
Letisha van den Berg, a representative of Aggregate and Sand Producers Association of Southern Africa, said some association members had small mines and most could not afford generators to run their operations. This had led to some closing shop.
Van den Berg said: “What the guys are doing is looking at the frequency, only producing on demand. They do their major maintenance during load shedding instead of the December periods.
“They have engaged with the DMRE (Department of Mineral Resources and Energy) and with Eskom to see how we can assist in energy generation. Some of our smaller mines have solar projects.”
Van den Berg called for collaboration with other entities to form partnerships to find solutions in solar to contribute to generation as this can positively impact the mines and communities and reduce demand on the grid.
South African Diamond Producers Organisation (Sadpo) representative Lyndon de Meillon said most Sadpo member's profit margins were small, between 5% and 7%.
De Meillon said that in the past many of the members had started to move over to Eskom and away from diesel because diesel was about 40% of their cost per month.
“If your electricity comes from Eskom, you save about 5% of your total monthly costs. Now Eskom has become not being reliable with load shedding.
“We had to start looking at running on generators from time to time. Now, that's not a simple calculation in terms of what the cost implications are of diesel. Our members are running quite large plants. You can't just stop a plant and start it up on a generator. There's a process involved. And we've calculated that it costs us and takes about an hour a shift to switch over from Eskom to a generator. So that's an added cost,” De Meillon said.
He said Sadpo members were also running sophisticated machinery, such as X-ray machines and scanners, which were being damaged by the worsening quality of power dispatched by Eskom. “All these factors have now led to our members seeing an increase of about 10% in monthly costs instead of the 5% savings they had achieved before by relying on Eskom power,” De Meillon said.
Coal producer Vuna Group representative Crause Mabudafhasi said the miner was forced to close the underground operation it had started due to the unreliable energy supply from Eskom. “Additionally, our external coal washing service provider was also impacted by load shedding, which was starting to affect our production,” he said.
Meanwhile, on bulk logistics, Van den Berg said cement producers struggled to move their products in bulk to ready-mix production sites, with some waiting up to three months to move product by rail. She said this had led to cement producers using trucks to transport products on roads, which added costs and led to road deterioration.
“This is why much of South Africa's cement is currently imported, as the price of cement relates to energy and logistics. Road transport is a big challenge for our members, and we do not have a solution,” she said.
Mabudafhasi said Vuna used to get an average of about six trains a month. By the end of 2022, the group was getting an average of one to two trains a month. “We had to resort to road transportation to close the gap left by Transnet's lack of service,” he said.
Chrom Tech CEO Jono Gay said there needed to be collective solutions and public-private partnerships because many companies would not be able to overcome the challenges alone.