Output at Amplats Hit by Eskom Power Cuts

South African miner Anglo American Platinum Ltd’s (Amplats) first-quarter production fell 6%, hit by problems at power supplier Eskom, operational challenges and ore stockpiling in the same period the year before.

Power cuts implemented by Eskom, which supplies more than 90% of electricity in Africa’s most advanced economy, pose a threat to miners who are among the biggest users of power in the country and are already grappling with weak profits.

Amplats’ total platinum group metal (PGM) production fell 9% to 998,900 ounces for the quarter ended on 31 March, from 1,062,800 ounces in the same period a year ago.

Eskom cut power across the country in February and March as low coal supplies, a severe cash crunch, and multiple failures at its ageing fleet of power stations throttled supply.

Amplats said the power cuts hit PGM production at its Mogalakwena operations, which declined by 6% to 307,200 ounces, and at its Amandelbult operations, which decreased 7% to 192,800 ounces.

In February, Amplats said it lost 14,000 platinum ounces when Eskom implemented five straight days of power cuts and was considering building a 100-megawatt solar power plant at its Mogalakwena operations.

Amplats said if power disruptions persisted, there could be an impact on the timing of refining the built-up work-in-progress inventory in full, which it expects to have refined by the end of 2019.