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Eskom hikes will cause job losses – mines

Mines have warned they’ll be forced to lay off workers if Eskom gets its 16% electricity tariff hike.

Mines have warned they’ll be forced to lay off even more workers if Eskom gets its 16% electricity tariff hike. Picture: AFP

MIDRAND - Mines will be forced to retrench even more workers if Eskom gets its 16 percent electricity tariff hike.

This was heard during National Energy Regulator of South Africa (Nersa)'s public hearings on the issue in Midrand, north of Johannesburg.

The parastatal is asking for a 16 percent price increase every year, for the next five years.

Gold Fields Executive Vice President and regional head Peter Turner said mines were already stretched in terms of other operational expenses.

He said there was no room for further hikes.

"There is just simply no ways [sic] that we could maintain this kind of operating model without some form of restructuring, resizing or downsizing of some sort."

Turner said their calculations, using a 16 percent increase hike forecast, were worrying.

"We would have 50 percent of our business under water within five years. That would (have an) impact on 15,000 jobs."

Earlier in the day, the Chamber of Mines' Roger Baxter said big business was already under strain.

He warned the hikes could affect the viability of some businesses and warned that companies could collapse.

FOOD SECURITY CONCERNS

Agricultural union Agri SA warned that food security could be threatened if Eskom gets its tariff hike.

Deputy Executive Director Johan Pienaar said the maize industry could be forced to operate at a loss.

"It will lead to a decrease in nominal profits from the current positive level of R394 per hectare, to a level of minus R3000 in the next five years."

Coupled with the farmworkers strike in the Western Cape and increasing global food prices, South African consumers could be forced to tighten their belts even further.

In July, global food prices soared by 10 percent, the World Bank said in a statement.

The jump was attributed to droughts in in the United States and Eastern Europe.

At the same time, food prices are expected to remain at high levels through 2013.

The United Nations' food agency says low stocks pose the risk of sharp price hikes if crops fail.

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