 JOHANNESBURG, South Africa (AP) - Gold production in the world leading supplier South Africa fell more than 10 percent in the second quarter compared to the same period last year, the industry said Thursday, blaming electricity shortages since the beginning of the year.
A dire fuel shortage caused by poor government planning forced rolling power cuts across the country in the first couple of months of the year. Since February, industries have been limited to 90 percent of their normal power usage.
"The key reason was the national electricity emergency," said a statement by the Chamber of Mines, which represents leading miners. It said the industry continues to bear much of the burden of power shortages and insisted other electricity users must urgently do more to cut power use "given the significant export earnings and employment intensity of mining."
Mines are one of the country's biggest employers, providing jobs for some 400,000 people. But the industry has warned that the electricity problems would force them to lay off thousands of workers. This brought an outcry from trade unions, which claim hundreds of miners have lost jobs as a result of the power problems. Mining companies have given other reasons for the layoffs.
South Africa produced 80 percent of the world's gold supply in 1970, but production has slumped from 1,000 tons that year to 275 tons last year. As production slips and resources are depleted, the United States is threatening to supplant South Africa as the world's leading producer.
South Africa's government has blamed rising demand and cheap prices for its electricity problems, though it also has conceded that it ignored warnings 10 years ago that more investment in power-generating facilities was needed.  Government regulators approved a 13.3 percent average increase in electricity rates in June, following a 14 percent hike in December.
The country has long depended on coal-powered electricity for power-guzzling industries such as aluminum smelters. But in July, the government said it would move away from cheap coal and embrace nuclear and renewable energy in a bid to combat global warming.
Total gold production fell 10.4 percent in the second quarter compared to the same period last year. Still that was an improvement on the first quarter, when the power shortages forced gold mines to close for one week and production was down 16.8 percent compared to the same period in 2007.
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On the Net:
Chamber of Mines of South Africa: http://www.bullion.org.za |