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Page added on March 30, 2006

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South Africa: Power Cuts Trouble Mining Industry

BHP Billiton, the world’s biggest miner, may delay expansion in South Africa because the country is running out of cheap and abundant electricity.

Power cuts this year in Johannesburg and Cape Town, the country’s largest cities, shut oil refineries, halted textile mills and plunged millions of homes into darkness.

“We got caught out,” said Alec Erwin, minister of public enterprises, at a press conference in Cape Town this month. Demand outstripped supply two years ahead of estimates.

State-owned Eskom Holdings Ltd., which supplies 95 percent of South Africa’s power, hasn’t kept pace with economic growth, which accelerated to a 21-year high of 4.9 percent in 2005. Demand climbed as industries such as platinum mining expanded and power was rolled out to areas populated by the black majority, who were deprived of basic services under apartheid.

Bloomberg



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