Ten years ago in 1998 Eskom, the government owned power generation company of South Africa presented a report with a warning of energy crisis that the country is going to encounter in the near future. But the government entirely overlooked the warning and marched on without taking preventive measures to counter such a situation.
Now the country and other neighboring states, relying on the SA’s electricity supplies are in serious trouble. Eskom has cut off power indefinitely to a number of mines including majors of this field like Anglo-Gold Ashanti, Anglo Platinum, Gold Fields, Harmony Gold and Impala on Friday in an attempt to alleviate a nationwide electricity shortage that has reached crisis proportions.
South Africa is the world’s largest producer of platinum and second biggest producer of gold, and suspension of work due to power supplies will further push upward, the already stretched precious metal market to all time highs. Harmony puts its production loss per day at $8.3 million and the overall country’s loss is estimated at R 1 billion per day. Power supply crunch is affecting the platinum market and SA shares around 80% of world production. To resume mining activities, the companies need at least 90% of power supply restored immediately. But the government promises only 75% to be made available quickly.
The power outages have put brakes on the economic growth of the nation which mainly depend on mining businesses. The worst affected are the unorganized workers of this sector and they are completely clueless about their future. Some normalcy is expected only in 3 – 4 weeks, is escalating the fears of workers and industry as a whole.
Eskom warns that the power crisis would last until 2013. This further puts doubts on the hosting of the soccer world cup to be held in the year 2010. If the government does not make an appeal for international intervention, it would not be just jeopardizing the prospect of hosting the world cup but also the economic growth of the nation at large.