South African President Cyril Ramaphosa cut short a trip abroad to deal with an escalating crisis at the state power company, which imposed a sixth day of blackouts that 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.
The Eskom debacle is the result of graft running rampant following the end of apartheid and this is not the first time powercuts have been an issue in South Africa. The massive run-up in the price of platinum in 2007/08 was in no small part as a result of power being cut off to mines. When power was reinstated the price came back down.Click HERE to subscribe to Fuller Treacy Money Back to top