Chamber calling for new electricity dispensation, Randgold finding at $10/oz, selling at $1 000/oz, ongoing ferrochrome price rises expected in 2010

South Africa's Chamber of Mines is calling for a new electricity dispensation for this country. Read on page 5 of Chamber of Mines CE Zoli Diliza requesting that fundamental changes be made to end Eskom's dominance as both the player and the referee of South Africa's electricity generation business.

At the same time, the TSX- and Botswana-listed CIC Energy says that South Africa's new electricity regulations on generation should make provision for the Energy Minister - and not Eskom - to determine what buyers will pay when entering into power purchase agreements with independent power producers. CIC is building an energy complex on the Botswana-South Africa border.

Diliza says that Eskom's proposed electricity tariff increase of 45% a year, each year for the next three years, is unacceptable to the mining industry, and adds that it is imperative for mining to have access to an "effective and reliable electricity supply" if it is to continue to create wealth and to provide jobs.

Randgold Resources CEO Dr Mark Bristow says on page 4 of this edition of Mining Weekly that his company is doing the good business of finding its gold at $10/oz and being able to sell it at $1 000/oz.

While his company's long-standing strategy of discovery and development continues to work well, it has also placed it in a financial position to be aggressive when more expensive acquisition opportunities do arise, as evidenced with its acquisition of Kibali - formerly Moto - in the Democratic Republic of Congo (DRC). Randgold is developing four new gold mines in Africa: Tongon, in Côte d'Ivoire; Massawa, in Senegal; Kibali, in the DRC; and the new Gounkoto, in Mali, each with deposits of more than three-million ounces of gold.

London-listed South African ferrochrome producer International Ferro Metals (IFM) says in a report on page 10 of this edition of Mining Weekly that it expects the ferrochrome price to continue to rise throughout 2010. IFM CEO David Kovarsky expects the upward trend to resume as 2010 kicks off, despite the downturn in demand in the September quarter.

The ferrochrome price is $1,03/lb currently, up from $0,89/lb in the September 2009 quarter, and $0,69/lb in the June quarter. The $1,03/lb price level is expected to persist as Europe and North America adopt it as the benchmark. Though the spot price of ferrochrome has been softer in China, it is expected to firm once Chinese stockpiles normalise.

To watch a video on new acting Eskom chairperson and CEO Mpho Makwana, go to www.miningweekly.com and click on ‘Multimedia' and then on ‘Video Clips'.