Saturday, January 26, 2008

South African Power Crisis Affects Gold Miners in Bad Way

The ongoing energy crisis continues to get progressively worse hampering the precious metals mining companies that rely on a regular supply of electricity to conduct their operations. While this is very bullish for gold, it is not bullish for gold mining companies operating in this area.

South Africa Power Crisis Deepens,
Risking Its Economy, Investments

January 25, 2008 11:56 a.m.

JOHANNESBURG -- A power-supply crisis in South Africa that has frustrated individuals, thrown business into the dark and forced the suspension of mining activity risks denting the country's economic growth and dampening the appetite of foreign investors.

The scope of the crisis was highlighted Friday when the government said it was treating the situation as a national emergency after some of the world's largest mining companies, including AngloGold Ashanti Ltd. and Anglo Platinum Ltd., said they had halted operations across South Africa because the state power provider couldn't ensure the supply of electricity.

Gold Fields Ltd. said it had been told by Eskom Holdings Ltd., which generates roughly 95% of the country's electricity, that the supply of power couldn't be guaranteed for between two and four weeks.

South Africa, the continent's economic engine, has been knocked by two weeks of rolling blackouts that have halted business for hours at a time each day, caused extended traffic jams and added further pressure to the already shaky government of President Thabo Mbeki.

Story continues here.....