South Africa Announces Electricity Rationing; Gold Mining Companies Suspend Operations | Voice of America - English
South Africa has announced the rationing of electricity in order to ease power outages that have crippled businesses and darkened neighborhoods for the past two weeks. A decision by gold mining firms to suspend operations due to the power shortage has sent the price of gold to record highs.
South Africa's Minister of Public Enterprises, Alec Erwin, announced the rationing plan Friday after an emergency cabinet meeting. "It is the view of cabinet that the unprecedented, unplanned power outages must now be treated as a national electricity emergency that has to be addressed with the urgent, vigorous and coordinated actions commensurate with such an emergency situation," he said. Under the plan, commercial consumers will be required to reduce consumption by five to 20 percent. Private consumers will have to reduce their usage by 10 percent. Traffic and street lights will be backed up by solar-powered batteries. And a program is to be launched to install one million solar water heaters in three years and convert lighting to energy-saving fluorescent bulbs. Also on Friday, South Africa's major gold mining companies suspended operations over safety concerns after the state-owned power company, Eskom, advised it could not guarantee electrical power at the mines. The world's largest platinum mine also suspended operations. The price of gold and platinum on world markets reached record highs. Eskom has also cut exports of electricity to neighboring countries. Botswana - which imports 70 percent of its power from South Africa - and Namibia - which imports 40 percent - were especially hard hit. The head of the Business Unity association, Jerry Vilakazi, says businessmen are welcoming the government's plan. "We were getting worried that over the past two weeks we have seen the situation deteriorating day by day," he said. "Business has been hit very hard. For the government to come forward to assure us that they are seriously addressing this issue was very critical." South Africa has faced growing shortages of electrical power for months because of a lack of investment in new power plants in its booming economy. Senior officials at Eskom began warning a decade ago that the government needed to invest in more power plants. But the government delayed while it debated whether to privatize part of the industry, a proposal that eventually was rejected. The lack of supply became critical a few weeks ago when Eskom took several power plants off line for routine maintenance and several other units were shut down because of technical problems. The South African economy has been growing at a rate of more than five percent per year. The government's goal was to reach six percent this year. But the director of the Econometrix think tank, economist Azar Jammine, says that is no longer likely. "The most devastating blow is what this proves is that there is a ceiling of approximately four percent annual growth to what the South African economy can achieve for next six to seven years," Jammine said. "And that is not as much as we would have hoped would have been achieved." The government plans to invest some $40 billion in the construction of new plants. But these will only be operational in five years. The government also plans to reactivate older, decommissioned plants. But this will take several years to accomplish.