Platinum Strike Relieves South Africa’s Constrained Power System

A strike at the three largest platinum producers has cut power demand at South African mines, a silver lining for the nation’s constrained electricity system.

“Demand from the platinum sector is down by about 400 megawatts,” Andrew Etzinger, a spokesman for state-owned utility Eskom Holdings SOC Ltd., said in an e-mail. That’s a 17 percent decline from normal demand, he said.

Workers at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LON) have been on strike for more than a month in a dispute over pay. The shutdown of operations has cut power demand, helping Eskom to avoid a repeat of the blackouts that affected homes, mines and factories for five days in 2008.

Other energy users have also reduced consumption after Eskom, which provides 95 percent of the nation’s power, employed emergency measures to ask them to cut usage twice last week as four generating units halted for unplanned maintenance. About 23 percent of the utility’s 42,500 megawatts of installed capacity has been out of service this year, Eskom data show.

Anglo Platinum, Impala and Lonmin have lost 5.4 billion rand ($502 million) in revenue since more than 70,000 members of the Association of Mineworkers and Construction Union walked out. The AMCU is scheduled to meet today with the Commission for Conciliation, Mediation and Arbitration, which is facilitating negotiations, after meeting on Feb. 24 with the companies.

Other miners operating in South Africa include Glencore Xstrata Plc (GLEN) and BHP Billiton Ltd.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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