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Daily Metal Prices & Market News
Thursday 20th of November 2008
Tuesday, January 29, 2008

Gold stocks plummet on South African power crisis

Gold stocks plummet on South African power crisis

Stocks in South African Tier I gold companies listed on the New York Stock Exchange fell sharply at the beginning of this week.

AngloGold Ashanti, Gold Fields and Harmony Gold have all seen heavy selling by investors, with Gold Fields the greatest casualty so far, in terms of value lost.

Platinum stocks have also fallen (the country’s platinum producers currently supply around two-thirds of platinum-group-metals world-wide).

Among diversified miners, Anglo American has seen the heaviest loss, reflecting the fact that one-third of its assets are located in South Africa.

The markets have been responding to a crisis in South Africa’s electricity supply, which at the end of last week halted production at mines and industrial plants across the country.

Gold Fields has reported that its power supply has been restored to 71% of total average consumption.

However around 50% of that consumption is required to pump, ventilate and refrigerate its operations and the level restored is insufficient for “production or beneficiation purposes”.

Urgent meetings are being held with South Africa’s state power utility, Eskom, and other stakeholders, with a view to increasing power supplies to a level that can support full production.

In recent months, South Africa’s industrial and residential areas have been hit by daily power cuts as Eskom’s systems and equipment have failed to cope with the increasing demands of Africa’s largest economy.

 

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