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Last Updated: Friday, 25 January 2008, 10:18 GMT
SA gold mines shut by power cuts
South African gold miners
Mining plays a key role in South Africa's economy
South Africa's biggest gold and platinum mining companies have suspended production because of a spate of recent power cuts.

They took the drastic measure after state power company Eskom said it could not guarantee supplies, raising fears of miners being trapped underground.

South Africa is one of the world's biggest producers of platinum and gold.

The power cuts are a "national emergency", according to Public Enterprises Minister Alec Erwin.

"We are viewing the next two years as being critical," he said but denied reports that the power cuts could hit South Africa's hosting of the football World Cup in 2010.

He said that the government must share the blame for the power cuts.

Power is like oxygen, it's essential for any half-modern economy
Goolam Ballim
Standard Bank Group

South Africa's power shortages reached their highest level on Thursday, an Eskom spokesperson said.

South Africa's three biggest gold producers AngloGold Ashanti, Gold Fields and Harmony have suspended production, along with the world's biggest platinum miner, Anglo Platinum.

"We are only running power for emergency supplies, such as pumping water out, and have stopped producing at all mines," AngloGold spokesman Steve Lenahan told Reuters news agency.

The announcement has led to a big jump in the price of both precious metals on world markets, while shares in the four companies have slumped.

Minerals and Energy Minister Buyelwa Sonjica said electricity rationing would be introduced as a "quick-hit" solution.

Goolam Ballim, chief economist of Standard Bank Group, warned that the power cuts would reduce South Africa's economic growth.

"Power is like oxygen, it's essential for any half-modern economy,'' he said, according to Bloomberg news agency.

South Africa has already reduced electricity supplies to its neighbours.

This has affected countries such as Zimbabwe, Zambia, Botswana, Mozambique and Namibia.



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