According to Sibanye, electricity had cost the company about R2.8-billion in 2014.
With labour costs accounting for another 55%, this meant that 75% of the gold miner’s operating costs were beyond its control.
“This is not a good place to be,” Sibanye CEO Neal Froneman said at the company’s year-end financial results presentation, in Sandton, on Thursday.
Further, load shedding had a significant impact on operations – a situation that was not likely to change as Eskom battled higher demand against critical power shortages.
“To mitigate the short-term risk, we have continued to work with Eskom to manage and reduce the impact of load shedding on our operations,” he explained, adding that it was clear, however, that the security of electricity supply and rising costs would remain an issue.
The modular power plant, expected to come online, possibly in phased 50 MW stages, at a site near Driefontein in 2017, would remove 10% of the company’s average daily energy requirements from the national grid.