Free Newsletter
 Subscribe Now
 BR Blog

 HOME
Eskom hike plan expected to be rejected  Comments
November 12, 2009


The South African government is expected to reject a proposal by utility Eskom to triple tariffs partly because of the impact they would have on the gold sector, the chief of AngloGold Ashanti said on Wednesday.

Chief Executive Mark Cutifani also told the RBC gold conference in London that an efficiency and restructuring drive was due to cut the AngloGold workforce in South Africa by 5 to 10 000 people over the next five years from 30 000, but forced layoffs would be avoided.

Up to 1 million people, including workers in the sector and dependents, would likely suffer if if a proposal was implemented by Eskom to hike tariffs by 45 percent a year over the next three years, he said.

"As a consequence I do not believe the Eskom 45-45-45 proposal will fly," Cutifani said.

"Certainly the indications we've had from within government is that they understand the problem."

Power rates would likely double over three years instead of triple as under the Eskom proposals, he added, and the rand was strengthening, meaning it was all the more important to boost efficiency in South Africa by about 30 percent over three years.


He said a doubling of rates would lead to a 10 percent hike in cash costs for AngloGold -- the world's third biggest gold producer and Africa's largest.

Cutifani also said a drive to cut costs and boost output in Ghana and Tanzania was bearing fruit.

Cash costs at Obuasi in Ghana have already been shaved by $150 (R1 109) per ounce and $100 more is due to come off over the next six months, he said.

The mine produced 92 000 ounces during the three months to end September at cash costs of $671 per ounce.

"Within three years we would expect to be producing 500 000 ounces (a year) (at Obuasi) at equivalent $500 cash operating cost.".

AngloGold, which has 19 operations in 10 countries, acquired Obuasi when it bought Ghana's Ashanti Goldfields in 2004 for $1.44 billion.

The group lowered its full-year guidance on Nov. 2 to between 4.7 million and 4.8 million ounces from its original target of 4.9 million to 5 million. - Reuters
BOOKMARK THIS STORY

Social bookmarking allows users to save and categorise a personal collection of bookmarks and share them with others. This is different to using your own browser bookmarks which are available using the menus within your web browser.

Use the links below to share this article on the social bookmarking site of your choice.

Read more about social bookmarking at Wikipedia - Social Bookmarking

Showing page 1 of 2 comment pages, 13 total comments
12 Weeks ago J.Z. Vuka wrote :
Well said Lupercus~~ I totally agree with you! You have said it without predilection. I wish Business Report can relay your comment to politicians so that they can go back to the drawing board and make amends accordingly. Bessie Head was once asked why she became a writer/jounalist instead of a politician, since most of her books had political proclivity, and this was her response: " My world opposes the world of politicians because they plan for and dictate to the people but in my world people plan for themselves and dictate their ideas to me" quote unquote. This Bantu ba se Mzansi, Suid Afrikaanse mense, Ma Afrika borwa, fellow South Africans.... is democracy in its abundance i.e goverment by the people and for the people.
12 Weeks ago Lupercus wrote :
The only commonsense solution - reject the request before it becomes a bi-annual occurrence. George Bernard Shaw once said "Hegel was right when he said that we learn from history that man can never learn anything from history." South African politicians have learned nothing by studying the events to the north. Every country that gained it's "freedom from oppression and colonialism" immediately proceeded to oppress not only their own people, but also all those who had helped build the country, whatever the colour of their skins. The arrogance of our political leaders (of all parties) is unbelievable. As my daddy used to say "They ain't worth feeding, son". The parastatals are falling apart simply because the ruling party felt they had to reward the so called "comrades" for their efforts in gaining "freedom". We have incompetents in every government department in our country (both at local and national level). As one of my colleagues put it, "It's not so much that they don't know, it's the fact that they don't know they don't know". Now Tokyo has placed "one of his private jets" at the disposal of his deputy. My God, how many private jets does he have? And how did he earn them?? As we now know - "We have an economy that is more and more based on unproductive people exchanging money with other unproductive people “ Let's face it, the ANC had better read the Freedom Charter again, get rid of the incompetents and promote people to position of responsibility on expertise and experience alone - forget the skin colour. If the person is black and meets all the criteria - appoint that person. Skin colour is no indication of a person’s ability, intelligence or integrity. So stop depriving those who deserve the top positions simply because of skin colour or political leanings. Get rid of the idiots trying to run the SAA, Eskom, Armscor, etc and appoint people with the ability and expertise to perform. Otherwise, look north my friends and learn a little but from history for a change.
12 Weeks ago Cobus wrote :
@J.Z. Vuka - have you been living in a complete news blackout the last few years? What you're saying is old news... And Eskom doesn't need to increase tariffs by 2x to 3x as they can approach international finance institutions for assistance, the reason they want to do increase tariffs first is that they can then finance the construction without being indebted and can therefore return to profitability ASAP. So Eskom then becomes profitable at the expense of SA's economy...
12 Weeks ago The Watchman wrote :
It takes a lot more than a fancy education and a fancy suit to make a man worthy of commanding respect from fellow workers. It seems that many of those appointed to senior posts are under the impression that the title they bear entitles them to do as they please; that they are above the law. The need to thoroughly investigate and test those who are possible candidates for high-ranking positions; this even before only probational appointment is even considered, should be very firmly entrenched. There is no way; this particularly in the current, complex South African political and corporate climate, that the situation can be handled in any other way. Recommendations or referrals alone should not be considered as adequate proof of capability. Strictly, on trial only, before a firm appointment! - Thereafter, only performance-based rewards. Imagine the true Corporate groups being managed by parastatals? ? ?
12 Weeks ago Taxpayer wrote :
Someone has to pay - now it will be the few taxpayers rather than the many consumers
12 Weeks ago ursa negro wrote :
okay... but if we go back to rolling blackouts, we know where to blame. [i can see maroga saying "i told you so" from here.]
12 Weeks ago Anonymous wrote :
to double the prices in 3 years is still not good...JG
12 Weeks ago Susan wrote :
Well, hopefully, there is light at the end of the tunnel:-)
12 Weeks ago J.Z. Vuka wrote :
I am not an ESKOM employee neither am I affiliated to ESKOM in any way, form, shape or figure but I am a South African citizen born and bred here. In my opinion the estimation/expectation of Eskom hike plan being rebuffed is not good news at all nor is it what the country needs at this stage, and I know most people will be at a variance with me because no one is willing to spend money in such times. Rumour has it that our goverment was made aware that there's a need for establishment of more power stations but they(goverment of that time) did not find it worthwhile for more stations to be built at that stage, nevertheless/apparently funds were allocated so that when they see a need for more power stations there would be funds. Should this be a verity then I wonder what happened to those funds whcih were allocated for times as these? We cannot be sitting on this question cos it will not provide us with electricity, let us (without prejudice) help Eskom in ensuring that it supplies electricity to the people of Southern Africa and for this to be done the hike plan has to be approved. Our government should also play a role in this i.e if Eskom wants a 40% increase, in view of the fact that the electricity is high as it is now then the state should find a subsidy for the consumers.
12 Weeks ago Anonymous wrote :
Good news, but will the "load shedding" all of sudden come back again, I mean the last one came because Eskom didn't get the hike they wanted too. So we had all the "maintenance".
HAVE YOUR SAY
Please enter your comment into the text box below.
Note: all comments are moderated (see our moderation policy) and may take some time to display, or may not appear at all.
If you would like to use an alias, please type it below. If you do not enter an alias you comment under a Anonymous byline.
Type your email address below - your comment will not be accepted without it. This is required as part of our moderation guidelines, but your address will not be published or distributed.
Lastly, to help fight spam, enter the letters in the image below as you see them.

     

BUSINESS SERVICES
Awesome UK Lotto's
Business Directory
Car Insurance
Car Insurance for Women
City Guide
Insurance Quote
Life Insurance
Life Insurance for Women
Maps & Direction
Medical Aid
Meetings Africa
Mobile Business Directory
Online Shopping
Personal Loans
Play Huge Lottos
Property Search
Travel Specials

MOBILE SERVICES
 Get Business Headlines & Indicators
 on your phone - dial *120*IOL*5#
 Click here to find out more (SA only)



News


Markets


Technology News


Company News


International