The key reason for the year-on-year decline in gold production was the national electricity emergency which effectively closed the gold mining industry from January 25-31, 2008, and which then curtailed electricity supply to the gold mining sector to 90% of normal usage. The curtailment of electricity supply to 90% proved to be exceptionally challenging for the industry and during March 2008 some mines were able to by application get back some supply to help stabilize operations. The approval of extra electricity supply, above the 90% level was then granted to some mines on a case-by-case basis. There was not a blanket increase in electricity supply to 95%.

Since the start of the electricity emergency in January 2008 Eskom’s large industrial customers have mostly borne the brunt of the need for electricity savings in the economy, to the extent that the electricity supply curtailment to these users has effectively bailed the country out of a potentially serious situation. But the mining industry is seriously concerned about the fact that very few other sectors have achieved much savings, such that the burden still remains on mining and the other large industrial customers. Given the significant export earnings and employment intensity of mining, it is clear that this situation cannot continue indefinitely. Other users of electricity (government, parastatals, financial services, tourism, households, etc.) have to do more on an urgent basis to create some space for the sectors that have been curtailed since January.