South Africa's Government has appealed to mining firms to help cut power consumption to ease the pressure of the power crisis.

Energy Minister Buyelwa Sonjica admitted that the situation would have a bad effect on the country's mining operations but asked firms to cut back on their power usage.

Mining companies are now operating at 90 per cent of their normal power needs but this is still threatening output and profits, Reuters report.

Some believe the power deficit may continue despite plans for expanding generation.

CIC Energy President Greg Kinross believes that the country will still be short of energy even after Eskom's additional 16,000 MW of power is drafted in.

"There is need for more projects in the region," he said after telling the Mining Indaba in Cape Town about the Mmamabula project in Botswana, Mining Weekly reports.

Meanwhile Peter Leon, a partner at Webber Wentzel Bowen, believes that South Africa's red tape is hindering the country from improving its mining facilities - as well as power shortages.

Speaking to World at Six, he said that mining licences were hard to come by in South Africa, compared to countries such as Ghana or Tanzania.

Mr Leon said that conditions needed to obtain a mining licence were "extremely vague" meaning that it can take firms well over a year before they can get a new licence.

But the factor affecting mining companies in the short-term is the energy crisis and the lack of guaranteed power is now affecting the development of early-stage projects.

Impala Platinum's Marula Merensky project in Limpopo is likely to be abandoned or delayed due to a lack of power commitments, it was announced this week.

Bob Gilmour, a spokesman for Impala Platinum, told Business Report: "Any project in the local mining sector that is at feasibility stage is unlikely to get power."

But Aquarius Platinum said that its new projects would not be affected while Wesizwe Platinum said their Pilanesberg project would not be in trouble.

Sources:

S.Africa urges miners to help cut power use, 06/02/08
http://africa.reuters.com/business/news/usnBAN623850.html

Mining the red tape, 05/02/08
http://business.iafrica.com/transcripts/860830.htm

Southern African power deficit ahead despite new projects, CIC's Kinross warns, 06/02/08
http://www.miningweekly.co.za/article.php?a_id=126229

Lack of power pledges from Eskom stymies platinum sector, 06/02/08
http://www.busrep.co.za/index.php?fArticleId=4240485&fSectionId=552&fSetId=662

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