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Power crisis meeting today

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Mozal smelter
Johannesburg, South Africa — MININGREVIEW.COM — 21 January, 2008 – South Africa’s state-owned power utility, Eskom Holdings Ltd., will be meeting with major electricity consumers today to discuss the way forward in the light of the country’s worst ever power crisis.

Eskom chief executive Jacob Maroga will be facing top executives of his company’s top 150 power users. This includes such mining giants as BHP Billiton, Anglo American, Xstrata, Sasol, and Richards Bay Minerals.

Today’s meeting comes in the wake of a week in which “most areas of the nation were without power for between 2.5 hours and 5 hours for a fifth day as the gap between supply and demand doubled to 3 000 megawatts from yesterday”, Eskom said on its website on Friday.

“These are South Africa’s longest and most frequent outages,” head of Eskom’s resource and strategy unit Steve Lennon confirmed, “and power cuts are likely to continue next week.”
Eskom – which supplies 95 percent of the country’s power, – is unable to meet demand following the four-year government delay in its US $42.6 billion (R290 billion) expansion programme. That holdup has sparked shortages that are being compounded by plant maintenance and breakdowns. 

“Electricity demand is reported to have increased 50 percent since apartheid ended in 1994, with Eskom’s reserve margin, or surplus capacity over peak demand, shrinking to between 7 percent and 10 percent from 25 percent in 2001,” adds Lennon.
It was revealed by Eskom last week that the Rio Tinto Group – the world’s biggest aluminium producer –  may have to delay plans for its US$2.7 billion (more than R18 billion) aluminum smelter at Coega in the Eastern Province of South Africa because of the power shortage.

“We may have to re-negotiate the power accord we signed with Alcan Inc., prior to that company being acquired by Rio,” Eskom finance director Bongani Nqwababa said. “You can’t sell what you don’t have.”