Business 15.5.2018 05:20 pm

Mining industry says Eskom’s proposed tariff hikes will result in mine closures

Mining industry says Eskom’s proposed tariff hikes will result in mine closures

The Chamber of Mines wants Eskom to rework its business plan to reduce its fixed and variable costs.

The South African mining industry said on Tuesday it opposes Eskom’s application for an increase to recover losses on its Regulatory Clearing Account (RCA), arguing it would have a severely negative impact on other sectors that depend on the mining sector.

Eskom has asked the National Energy Regulator of SA (Nersa) to grant it an additional three percent annual increase for the years 2020-2022 to help recoup losses on its RCA, and then to recover the balance over five years.

The RCA is a monitoring and tracking mechanism that compares costs and revenues assumed in the multi-year price determination (MYPD) made by Nersa when it awards tariff increases to Eskom, against the actual revenue and costs incurred by the utility.

If the application is granted, the Chamber said that the R66.6 billion increase that will be passed on to consumers will result in mine closures and have a severely negative impact on other sectors that depend on the mining sector.

“Eskom must rework its business plan to reduce its fixed and variable costs, while growing sales that will reduce the electricity tariff,” the Chamber said.

– African News Agency (ANA)

 

 

 

 

 

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