Johannesburg - South African mining companies hope to resume production later this week after being allowed to carry out underground maintenance work in mines across the country that have been crippled by a power crisis.
Analysts estimated that hundreds of millions of rand had already been lost by the sector as the halt on mining in the world's biggest platinum and second-largest gold producer entered its fourth day on Monday.
"We are starting to emerge from a crisis that had the potential to undermine the viability of the South African gold industry," Mark Cutifani, AngloGold Ashanti's CEO, said in a statement.
A meeting between mining firms, government officials and the state utility Eskom on Wednesday would determine when and how mines could start production. This is expected to be a phased process so as not to compromise the power grid. Mines would be asked to cut their power usage, officials said.
Eskom has warned the crisis may last for up to four weeks.
National emergency
The power crisis became a national emergency on Friday, stopping production in diamond, gold, platinum, coal and other mines and helping send precious metals prices to record highs while weakening South Africa's rand currency and gold shares.
The government insists the crisis does not threaten South Africa's plans to host the 2010 Fifa World Cup.
For weeks, homes, malls and businesses have been dark for hours each day while failed traffic lights have caused chaos on the roads.
President Thabo Mbeki's government, distracted by a leadership struggle in the ruling African National Congress, faces growing criticism for years of underinvestment in power generation.
Booming economy?
Analysts fear the booming economy, for which the government has targeted a 6% growth rate in order to fight poverty, could slow down. They add that the government ignored expert warnings going as far back as a decade to build new power plants.
Mineral extraction was unlikely to take place on Monday, but authorities said they would guarantee enough electricity to make mining areas safe, which could become risky or flooded if left without maintenance for long periods.
Anglo Platinum, the world's biggest producer of the metal, said some production may result from blasting meant to make the areas safe, but there would be no mining or smelting.
"We expect more clarity on when we can resume mining later in the week," said a company spokesperson.
AngloGold Ashanti, the world's third largest gold producer, said in a statement that it anticipates more power supply later this week that should enable a phased return to normal mining operations.
A bumpy ride
South Africa's rand fell 1% to R7.2250 against the dollar as investors continued to shun the currency, partly as a result of fears the power shortage could cut economic growth.
Gold and platinum held near their historic highs on jitters over the power crisis. Spot gold rose to $916.50/917.50 an ounce as platinum rose to $1 685/1 690 an ounce.
The crisis started after Eskom took down some power plants for routine summer maintenance. But other plants have broken down unexpectedly and coal stockpiles have dwindled.
Eskom plans to invest R300bn in power generation and infrastructure over the next five years, and has warned the country to expect a bumpy ride.
- Reuters