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Chamber of Mines says carbon tax will damage industry

20 May 2015   (0 Comments)
Posted by: Author: Allan Seccombe
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Author: Allan Seccombe (BDlive)

The Chamber of Mines urged the government to not implement a carbon tax next year, saying it would damage an already financially strained mining industry.

In a speech at the chamber’s 125 annual general meeting, its president Mike Teke said that at current prices, 31% of SA’s gold mines and nearly 40% of its platinum mines were making losses.

"The mining sector is also faced with other key challenges that contribute to the binding constraints for growth," Mr Teke said.

"One such key challenge is the absurdity of going ahead with introducing a carbon tax and carbon budget when SA’s existing carbon trajectory is even lower than the government’s peak plateau and decline commitment made in Copenhagen in 2009, and when electricity prices have increased at a rate that already discourages demand," he said.

He said the tax, slated for implementation next year, would "prejudice the survival and competitiveness of the carbon-intensive mining industry" which has already reduced its consumption of electricity by 20% in the past seven years.

The 12% tariff increase the National Energy Regulator of SA (Nersa) granted Eskom for this year has added R2bn in costs for the gold and platinum mines, which are deep-level and energy intensive, Mr Teke said. Eskom’s application for a further 13% increase would double that cost, he said.

The chamber wants the government to expedite progress in finalising amendments to the Mineral and Petroleum Development Act, which President Jacob Zuma referred back to parliament earlier this year over concerns that certain constitutional hurdles would not be cleared.

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