Gold News

Longer lasting SA power crisis could boost gold investment

Anglo American has revealed that Eskom's power crisis is continuing to hit the mining industry in South Africa and may take longer to resolve than was first thought.

The crisis was sparked in January when a near-collapse of the electricity grid meant mines were left without power for a full five days - at a cost of 50 billion rand to the country's economy.

Now Ian Morison, head of engineering in the company's technical division, has confirmed at a conference that the knock-on effects are continuing to create problems.

The struggle to get mines back up to full running capacity should help gold prices as output will continue to stall.

Mr. Morison said: "Mining is absolutely reliant on continuous, adequate, reliable and secure electrical power for safe and healthy access to the working place.

"Eskom is currently unable to guarantee a secure electrical power supply to the mines therefore we are mining at risk."

The ongoing nature of the troubles could also mean that the company's new projects may be delayed as it attempts to get energy reserves back up to normal operating levels.

Such a scenario would also provide a boost for anyone considering investing in gold in the long-term, as output may be compromised for several months to come.

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