The South African Chamber of Mines has welcomed the stance of the National Energy Regulator (NERSA) regarding Eskom's application for power price increases.

Eskom was granted permission for a 27 per cent increase in tariff, on top of the 14.2 per cent already promised, but it had asked for prices to be increased by as much as 60 per cent.

The Chamber believes the decision to rise prices was necessary, but called for smooth growth in prices rather than one-off hikes.

It had feared that sharp increases could have led to negative impacts on the economy, inflation and mining production.

"This clarity on expected electricity price increases over the next three years will enable the mining sector to plan and adjust more effectively over the next three years," a statement said.

But the price increases are still having an effect on the mining sector.

According to the Chamber, mines will have faced price increases of 34.2 per cent from July 1st, adding about R1.6 billion in costs to the industry.

Mines operating deep level operations could stand to add about 2.5 per cent to their cash costs, the statement claimed.



Source:

SA Chamber of Mines comment on the NERSA determination of Eskom's application, 18/06/08
http://www.mineweb.com/mineweb/view/mineweb/en/page674?oid=54950&sn=Detail