Ramaphosa Cuts Short Trip as Power Crisis Grips South Africa – by Paul Vecchiatto and Liezel Hill (Bloomberg/Yahoo – December 11, 2019)

https://finance.yahoo.com/

(Bloomberg) South African President Cyril Ramaphosa cut short a trip abroad to deal with an escalating crisis at the state power company, as week-long blackouts threaten to tip the economy into recession.

The rand declined the most in a month Tuesday as Eskom Holdings SOC Ltd. said there’s a high likelihood of power cuts all week and mining companies including Sibanye Gold Ltd., the world’s biggest platinum producer, temporarily halted operations. Vodacom Group Ltd., the nation’s biggest mobile operator, said the outages are disrupting its service.

Ramaphosa returned from Egypt, having terminated his trip a day early to “attend to urgent domestic priorities,” the presidency said in a statement. Eskom management will brief the president on Wednesday morning on “plans to mitigate and resolve the current electricity crisis,” it said.

“As plausible as some of the explanations that Eskom is putting forward are, it’s really not sufficient,” Ramaphosa’s spokeswoman Khusela Diko said. “We are supposed to ensure that we are on top of issues of maintenance and we are supposed to ensure that we are able to forward plan,’’ she said in an interview with SAFm radio Wednesday morning.

Eskom, which supplies 95% of the power used in Africa’s most industrialized economy, has struggled to meet demand for power since 2005, due to its failure to properly maintain aging power stations and invest in new ones. The latest round of outages were caused by simultaneous breakdowns at several plants and were exacerbated by heavy rains that caused flooding and soaked coal stockpiles.

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