Eskom Declares South Africa Emergency on Risk of Power Cuts


eskom-3Eskom Holdings SOC Ltd., which generates 95 percent of South Africa’s electricity, declared an emergency after it lost generating units, asking metal producers to cut use and raising the risk of power cuts in cities.

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The rand weakened against the dollar and the platinum price rose after the announcement, which followed warnings by Eskom last week and earlier today of tight supply. South Africa is the world’s biggest producer of platinum.

“Eskom is now following the protocol in terms of its emergency procedures in order to secure the power system,” the Johannesburg-based electricity utility said in an e-mailed statement today. “We have alerted our key industrial customers and have required them to reduce their load by a minimum of 10 percent.”

BHP Billiton Ltd.’s aluminum smelters are the country’s biggest power users. Platinum and gold producers also use electricity to move workers up and down the world’s deepest mine shafts.

Eskom is spending 500 billion rand ($50 billion) to replace aging equipment and add plants to avoid a repeat of 2008 blackouts that halted mines, including those owned by companies such as Anglo American Plc, for five days and paralyzed factories in the continent’s biggest economy.

The company will make “every effort” to avoid rolling blackouts, known locally as load-shedding, it said. Eskom, which produces about 85 percent of its power from coal, said about 27 percent of its 41,900-megawatt generating capacity was out for maintenance yesterday. The targeted surplus is at least 2,000 megawatts, Andrew Etzinger, a spokesman for the company, said by phone earlier today.

“Last time there was load-shedding the rand sold off 20 percent and there were massive bond outflows,” Peter Attard Montalto, an economist at Nomura Plc in London, said in a text message. “The system has more capacity and more demand management protocols but still its shows how tight and out of date much of the stock of generating capacity is.”

The rand erased an earlier advance of as much as 0.6 percent against the dollar after the announcement, losing 0.3 percent to 10.1789 by 5:03 p.m. in Johannesburg and extending its decline this year to 17 percent, the most among 16 major currencies tracked by Bloomberg. The spot price of platinum rose as much as 1.1 percent to $1,425.20 an ounce in London.

While the utility is conducting “a great deal of maintenance” on coal-fired plants, it also has shut one of two 920-megawatt units at its Koeberg plant, its sole nuclear operation, in Cape Town for repairs and refueling. The facility will return to service in the last week of December, Eskom said Nov. 10.

Babatunde Akinsola
Babatunde Akinsola
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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