'National emergency' as blackouts down S. African gold mines (Roundup)

Jan 25, 2008, 16:07 GMT

Johannesburg - South Africa on Friday declared the rolling blackouts that have wrought havoc across the country over the past two weeks a national emergency as the energy crisis ground production at mines in the world's second-largest gold producer to a halt.

Speaking on the power outages that have left homes and businesses in the dark for hours at a time costing the economy hundreds of millions of rands, Public Services Minister Alec Erwin acknowledged the government had a 'national emergency' on its hands.

And the government was at least partly to blame, he admitted.

'The president has accepted that this government got its timing wrong,' he said, after President Thabo Mbeki apologized recently for failing to make provisions for the energy shortages when warned of a looming power crisis 10 years ago.

The decision back then not to boost generating capacity has come back to haunt Mbeki's government as state electricity supplier Eskom is forced to undertake loadshedding - cutting power to some areas when supply is tight, often without warning.

Gold mining, one of the country's biggest earners, became the latest industry to take a hammering from the power cuts Friday when the three biggest producers - Anglogold Ashanti, Harmony Gold and Gold Fields - were forced to keep their workers above ground.

'Our mines have ceased operations because we have been told by Eskom that it might not be able to maintain power,' Anglogold Ashanti's public affairs manager Alan Fine told Deutsche Presse- Agentur dpa.

AngloGold produces 2.5 million ounces of gold a year in South Africa. Although he was unable to put a figure on lost production so far it was certainly in the 'millions of rands', Fine said.

Platinum, a precious metal of which South Africa is the world's largest producer and that, like gold, is currently enjoying record prices, was also hit.

AngloPlatinum, the world's largest producer of the metal used in car manufacturing and jewelry, had suspended all production at Eskom's request, company spokesman Trevor Raymond said.

Impala Platinum (Implats) also said one of its mines was at a standstill, denting production by 3,500 ounces of metal per day.

Perhaps most worrying for shares in both gold and platinum companies Eskom had given no indication when it would be safe to send workers back down, AngloGold's Fine and AngloPlatinum's Raymond said.

'Indications are that it may take as long as a month,' Solidarity trade union said in a statement.

In the event of a power cut at a mine, power to the shaft elevator could be interrupted, leaving miners stranded deep underground.

Although mines do have backup power sources these are for use only in emergencies.

Nearly two weeks of power cuts averaging two hours at a time have exasperated South Africans, already frustrated by high rates of violent crime and political uncertainty following the election of corruption accused Jacob Zuma to the head of the ruling party.

'I've always been a proud South African, born and grew up here, fought apartheid tooth and nail. Looks like I may be forced to go and work elsewhere in the world. What a shame,' a dentist whose business has suffered wrote on an internet website.

Public Services Minister Erwin and Minerals and Energy Minister Buyelwa Sonjica announced a host of measures to slash electricity consumption by 10-20 per cent, until the effects of a 300-billion- rand (42.4-billion-dollar) programme to boost generating capacity kicks in - starting in around five years' time.

Rationing in on the cards for domestic and business users, traffic lights nationwide will be switched to solar power, solar water heaters will be installed in homes and hospitals and building regulations will be amended to make new homes more energy efficient.

Erwin also announced that the government intended to freeze all major new industrial projects until the energy crisis had passed, a move thought likely to dent growth, already expected to fall to between 4 and 4.5 per cent this year from a 25-year high of 5.4 per cent in 2006.

'Very large energy-using projects ... are not on the cards for some time to come,' he said.

But, Erwin maintained, 'the growth of South Africa's economy at the current healthy levels can continue if we change our behaviour and become more energy efficient.'