Rolling power cuts across South Africa are putting the lights out on the country’s economy as gold and platinum mines suspend production.

Gold Fields, Harmony and AngloGold Ashanti, three of the country’s largest gold producers, said yesterday that they were ceasing production on safety grounds after Eskom, the state energy utility, said that it could not guarantee power supplies at their plants.

“We are only running power for emergency supplies, such as pumping water out, and have stopped producing at all mines,” an AngloGold spokesman said.

In what Alec Erwin, the Public Enterprises Minister, termed a “national emergency”, the world’s biggest platinum miner, Anglo Platinum, said that it, too, had ceased production at all its local mines because of a lack of reliable electricity supplies.

A spokesman said: "I can confirm that we have completely halted operations in South Africa to conserve power."

It is also understood that Anglo Platinum’s main rival, Impala Platinum, has also stopped operations. The company was not immediately available for comment.

South Africa, by far Africa’s largest economy, was also the world’s largest gold producer until last month, when it was overtaken by China.

The suspension of mining operations led to a big jump in the prices of both metals on world markets yesteday and a slump in the share value of affected companies.

The rand has subsequently weakened.

The shutdown has renewed fears that the energy crisis, which is two weeks old, would shatter investor confidence in the country and knock economic growth plans off target.

Growth of about 5 per cent over the past three years has fuelled a consumer boom among a newly emerging black middle class but failed to make an impact on high unemployment levels.

There have been reports that the heads of all major mining companies in the country had been called to crisis talks with the Government which has announced a serious of energy conserving measures.

They are likely to be informed of Government support, such as tax breaks, for those who import generators and take other energy saving measures.

Marius Kloppers, the South African boss of BHP Billiton, the world’s largest mining company, is reportedly flying to the country this weekend for emergency talks on whether to halt expansion plans at two aluminium smelters. A third smelter in Mozambique, dependent on the South African grid, has already cut production.

Jerry Vilakazi, Head of Business Unity in South Africa, told The Times the crisis had cost the country untold millions and severely damaged its reputation.

“The damage is huge, we are talking millions possibly billions of dollars. Many smaller companies have been on 50 per cent operating capacity for two weeks already,” he said.

“This new development is very worrying indeed. Mining is one of the biggest employers, but the issue of safety and security in that sector is paramount too… Our response now must be to instill confidence among domestic and foreign investors.”

Last December, gold miners in South Africa held a one-day national stoppage, the first in the country’s history, in protest over allegedly worsening safety standards in some of the deepest mines in the world where air supplies, water pumps, and lifts all need constant electricity supplies.

Frans Baleni, general secretary at the National Union of Mineworkers, said: "Work in the mines has become a matter of life and death."

Minerals and Energy Affairs Minister Buyelwa Sonjica said the Government would introduce a rationing programme as a “quick-hit” solution.

She said: “We have discussed how quotas will be allocated, who will be exempt from the programme, what incentives and penalties will be in place, when it will start and what legislative enablers we need to have in place for the programme to work.”

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills