BHP Billiton Ltd, Xstrata Plc and other industrial energy users in South Africa estimate the country’s power utility will boost tariffs 60% by 2016 a level they say is unsustainable.

The Johannesburg based Energy Intensive Users Group said in an e mailed statement said that “Electricity prices must not be ‘overcooked’ or South Africa will suffer.”

Eskom Holdings SOC Ltd may already have excess cash and is seeking returns that will increase profitability to unnecessarily high levels.

The state owned supplier of about 95% of the nation’s electricity raised tariffs 26% this year after doubling charges in the previous three years, saying prior increases didn’t match costs. Eskom has boosted borrowings as it struggled to fund a ZAR 500 billion (USD 69 billion) expansion to overcome a shortage that temporarily halted platinum, gold and other mining in 2008.

Mr Mike Rossouw head of the energy users group said that “We’ve reached a tipping point where we have to balance the fundability of Eskom’s build program and the affordability of electricity by industry.”

The group represents most large metal producers and accounts for about 44% of the electricity consumed in the nation.

(Sourced from Bloomberg)