September 08, 2008

South Africa declares electricity emergency

It is reported that leading South African gold and platinum mines stopped production Friday as the government declared a national electricity emergency in the face of power outages that have caused chaos and threatened to choke economic growth.

The government said there was no foreseeable end to the electricity shortages that have spilled over the nation's borders into Botswana and Namibia, which rely heavily on South African energy exports.

Mr Alec Erwin public enterprise minister after a Cabinet meeting told journalists "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. We are viewing the next two years as being critical.”

South African government and state owned utility Eskom said that South Africa's economic growth has outstripped energy supplies and the nation must cut use by 10% to 15%.

European coal prices rose the most in almost three weeks as Anglo American Plc and other mining companies shut production in South Africa because of power cuts. Anglo American, the second-biggest coal producer in the country, stopped five of its nine mines after state utility Eskom Holdings Ltd. said it couldn't guarantee electricity supply. More than a quarter of Europe's energy coal is shipped from Richards Bay.

China, the world's biggest coal producer, ordered domestic shippers to halt exports next month and in March to ease shortages. In Australia, the world's biggest energy coal exporter, rains disrupted mining in Queensland.