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Eskom declares electricity emergency

Johannesburg - Eskom declared a power supply emergency on Tuesday and urged key industrial customers to cut consumption to reduce pressure on the grid after the loss of some of its generating units.

"Eskom is now following the protocol in terms of its emergency procedures in order to secure the power system," it said in a statement.

"We have alerted our key industrial customers and have required them to reduce their load by a minimum of 10%," it added.

It has reduced power supply on Tuesday to mining giant BHP's aluminium smelters.

"Eskom load-sheds the smelters to assist in maintaining power supply in South Africa over peak periods with no compensation for loss of production during that period," the company said.

As a precautionary measure, the utility said it would also publish a schedule for rolling blackouts on Tuesday but added that it would make every effort to avoid load-shedding.

The announcement, which could hit output at factories, mines and smelters hit the rand, turning the currency slightly weaker against the dollar on the day after being a touch firmer beforehand.

Spot platinum rose nearly 1% to a session high $1,422.50/oz after the statement. South Africa is home to around 80% of the world's platinum reserves.

Nomura bank economist Peter Attard Montalto said the current crisis may be short lived, but was a predictable result of a network under severe strain.

"Given how tight the system is in general at the moment they may well require these cuts continue for a number of days and hence there will be some economic cost across the economy," he said in a note to clients.

"Eskom know the panic that such a declaration of emergency would induce and hence would clearly not do it unless absolutely necessary to force a heavy users cut."

Eskom also warned Tuesday that domestic consumers could be subject to restrictions, urging them to turn off boilers, pool pumps, air conditioning and all non-essential appliances.

Eskom provides 95% of South Africa's power but has struggled to ensure supply over the last five years as it has raced to bring long-overdue power plants online after the grid nearly collapsed in 2008.



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