At the National Energy Regulator of SA (Nersa) hearing in Midrand on Thursday, the Chamber of Mines said that Eskom's tariff-hike proposal - for a 16 increase in electricity prices every year over the next five-year period - showed that the utility was apparently more focused on its own credit rating instead of the larger interests of South Africa.

Drawing attention to the fact that over 50 percent of the platinum mines and nearly 37 percent of gold mines in South Africa are unprofitable or marginal, the Chamber said that the approval of Eskom's tariff-hike proposal to Nersa would push the mining industry over the tipping point.

The Chamber's senior executive Roger Baxter told the hearing that granting Eskom the permission to hike electricity tariffs as proposed would imply that the period of between 2007 and 2018 would witness electricity prices increasing by a whopping 589 percent.

Pointing out that two-thirds of Eskom's proposed tariff hike was attributable to return on capital and depreciation charges, Baxter said that the proposal clearly underscores Eskom's excessive focus on the profit from its new power plants; and added that the coal price was not the key driver behind the Eskom application as claimed.

Noting that "the economic impact of Eskom's proposals is substantially negative," Baxter said: "The South African economy cannot absorb the proposed further doubling of the price on the back of a price that has already trebled."