Sun, Jan 27, 2008 page1

• South Africa takes action to tackle power shortages

  • AP
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  Leading South African gold, diamond and platinum mines stopped production on Friday because of a lack of power as the government announced emergency steps to deal with outages causing chaos and misery and threatening economic growth.

  Neighbors like Botswana and Namibia, which rely heavily on South African energy exports, have also been badly hit by the disruptions in the region's economic and political powerhouse. The outages have undermined confidence in South Africa, with incidents like the stranding of hundreds of people on tourism icon Table Mountain because of a power cut gaining international media attention.

  "The unprecedented unplanned power outages must now be treated as a national electricity emergency situation that has to be addressed with urgent, vigorous and coordinated actions," South African Public Enterprise Minister Alec Erwin told journalists after a Cabinet meeting on Friday.

  "We are viewing the next two years as being critical," he said, as government officials unveiled measures, including rationing, price hikes and a massive switch to solar power.

  The crisis reached a new peak on Friday when mining companies including AngloGold, Harmony and Goldfields suspended virtually all operations for fear power cuts would trap workers underground. The stoppage is likely to cost hundreds of millions of rands to one of South Africa's most important industries and shatter already shaky investor confidence.

  Goldfields -- whose South African operations produce 7,000 ounces per day -- said Eskom, the state utility, had said the disruption could last up to four weeks after Eskom asked mines to cut electricity consumption by 60 percent per month.

  Diamond giant De Beers Consolidated Mines said it had stopped production in its six South African mines.

  What most angers business and consumers alike is that the rolling blackouts come without warning and so are particularly crippling.

  Nearly 40 people were trapped in a cable car in high winds for two hours and hundreds more were stranded until after midnight on the top of Table Mountain earlier this month. Simon Grindrod, a Cape Town city councilor, said that this could have been avoided if Eskom had just given 10 minutes warning.

  "The knock-on effect on Cape Town is immeasurable," he said. "A headline today is lost business tomorrow."

  The South African Tourism Services Association said earlier this week that the crisis jeopardized the hosting of the soccer World Cup in 2010.

  "Stadia may have all the most wonderful generators in the world to broadcast the games, but will people come to SA to see them if they know they will be going back to hotels and guest houses with no power? That means no hot meals, no clean laundry, no lights," said the tourism association's Michael Tatalias.

  Erwin said measures over the next two years would help ease pressure on supply ahead of the World Cup.

  "There is no threat to the successful holding of the event as plans to ensure electricity supply in that period are well advanced," he said.

  The government and Eskom say that demand for electricity in the buoyant economy has simply grown too fast to cope and now needs to be cut by 10 percent to 15 percent. But -- for the first time -- the government acknowledged it should share in the blame by ignoring a 1998 Eskom report warning of a serious energy crisis within 10 years. The government only gave the go-ahead to a new power station building program in 2004.

  "The president has accepted that this government got its timing wrong," Erwin said.
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