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.
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. But the company added that the probability for continued loadshedding, or planned rolling blackouts, “remained high for the rest of the week”.
Chief Operations Officer Jan Oberholzer told Reuters the power cuts earlier in the week were caused by a “perfect storm” of extreme rainfall and breakdowns at coal-fired power plants. One coal mine and three power stations had flooded, he said.
Unplanned breakdowns were occurring across Eskom’s coal-fired plants because previous managers had not done critical mid-life maintenance, he added.
The breakdowns were likely to persist as Eskom has neither the spare generating capacity nor the money to take all of the faulty coal units off-line and overhaul them, Oberholzer said.
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.
President Cyril Ramaphosa, who cut short a state visit to Egypt as the power crisis deepened, met with Eskom’s management and board 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. “He wants to understand how we got here.”
In the short run, a combination of drier weather and work places shutting down for Christmas will cool demand for power, relieving pressure on the grid, said Azar Jammine, director of South Africa-based consultancy Econometrix.
But he added: “it has created a lot of uncertainty over whether we can rely on energy security in South Africa, and that in itself is going to damage economic growth.”
Back in business
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 had said its losses due to the power cuts had amounted to R120 million, resumed operations at its mines from 1600 GMT on Tuesday.
Its deep-level Rustenburg and Marula mines, which halted production for a day, were still operating with 15% less power than normal on Wednesday, a spokesman said.
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.
AngloGold Ashanti shut down all its mines on Monday night and reopened them around 0600 GMT on Tuesday, a spokeswoman said.
“This obviously is a disruption to production,” she said, declining to quantify the impact.
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.