JOHANNESBURG (Reuters) – South African state power utility Eskom scaled back power cuts on Wednesday, providing relief to mining companies that were able to restart operations hit earlier this week by the worst blackouts in a decade.
Mine security officials walk underground at Sibanye Gold’s Masimthembe mine in Westonaria, South Africa, April 3, 2017. REUTERS/Mike Hutchings
A week of heavy rains across parts of South Africa has caused flooding, leading to evacuations and aggravating problems at the cash-strapped and indebted power company, which has been struggling to keep the lights on since 2008.
Eskom said it planned to reduce national grid supplies by 2,000 megawatts (MW) on Wednesday, down from a 6,000 MW reduction on Monday.
“We have made good progress in the system recovery largely as a result of several units being returned to service and the recovery from localised flooding at our power stations,” the company said in a statement.
But Eskom said plants continued to perform with low levels of reliability and the probability for loadshedding, or planned rolling blackouts, “remained high for the rest of the week.”
The power cuts, which have disrupted the supply of electricity to businesses and households across South Africa, dealt a further blow to an economy already teetering on the brink of recession.
Mining firms including Harmony Gold and Sibanye-Stillwater were forced to cut production on Monday because of power shortages.
Sibanye-Stillwater said its underground operations had resumed on Tuesday afternoon but would still operate with 10% less power than normal.
“We lost a day’s shifts. It will have an impact on quarterly results. It will be noticeable,” said James Wellsted, spokesman for Sibanye-Stillwater. “It’s a cumulative impact of all the different stages of load curtailment.”
Harmony said on Wednesday it had also resumed shifts at its underground mines on Tuesday afternoon.
Impala Platinum, which on Tuesday said its losses due to the power cuts had amounted to 120 million rand, did not immediately respond to a request for comment.
Petra Diamonds restarted operations at its Cullinan, Finsch and Koffiefontein mines on Tuesday evening after halting them on Monday when asked by Eskom to reduce its electricity load.
President Cyril Ramaphosa, who cut short a state visit to Egypt as the power crisis deepened, was scheduled to meet Eskom’s management on Wednesday.
“The president has put it on record that the issue of loadshedding … is a national crisis,” Ramaphosa’s spokeswoman Khusela Diko told news channel eNCA on Wednesday. “He wants to understand how we got here.”
South Africa’s cash-strapped state-owned companies have been a major headache for Ramaphosa who came to power nearly two years ago vowing to reverse years of mismanagement and economic stagnation.
On Monday, he vowed to take “drastic” steps if necessary to ensure their survival.
South African Airways was placed in bankruptcy protection last week and an independent administrator was appointed to run the state’s passenger rail company on Monday.
But loss-making Eskom, which generates more than 90% of the country’s power, is the “most serious risk” to the economy, the Treasury says. This is largely because of its 500 billion rand of debt, mostly government-backed.
Credit rating agency Moody’s has said Eskom’s troubles endanger South Africa’s only surviving investment-grade rating.
Reporting by Olivia Kumwenda-Mtambo and Helen Reid; Writing by Joe Bavier; Editing by Mark Potter and Kirsten Donovan