Power shortages cause suspension of mining in SA

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The decision to suspend mining activity was taken following an announcement by the state power company Eskom, that they could not guarantee power supplies. The mining companies have suspended operations in case a sudden power cut led to miners being trapped underground.

Alec Erwin, Public Enterprises Minister, described the power cuts as a "national emergency" and said that the government had to share responsibility for the power cuts, reports the BBC.

He said, "We are viewing the next two years as being critical." Erwin said that the cuts would not affect the 2010 football World Cup, to be hosted by South Africa.

An Eskom spokesperson said that power shortages reached their worst point on Thursday.

As a result the countries three largest gold miners, AngloGold, Ashanti and Gold Fields and Harmony have all suspended operations, as have Anglo Platinum, the worlds leading platinum miner. All four companies have seen their shares drop following the suspension of mining.

Steve Lenahan, an AngloGold spokesman, told Reuters, "We are only running power for emergency supplies, such as pumping water out, and have stopped producing at all mines."

The suspension of mining in South Africa, which is one of the world's biggest gold and platinum producers, has led to a sharp rise in precious metal prices around the world.

Buyelwa Sonjica, the Minerals and Energy Minister said that electricity rationing would be introduced as a "quick-hit" solution, reports the BBC.

In addition to suspending mining operations, the power shortages have led South Africa to reduce electricity supplies to neighbouring countries like Zimbabwe, Zambia, Botswana, Mozambique and Namibia.