South Africa short circuits ASX-listed miners

With South Africa facing the prospect of prolonged blackouts, water shortages and civil unrest, ASX-listed miners with assets there could be in a spot of trouble.

The country has been in the grips of crippling power shortages with rolling blackouts throwing the nation into darkness, sometimes for up to 12 hours.

State-owned Eskom, the utility at the centre of the crisis, is struggling to maintain its ageing infrastructure amid mounting debts and allegations of entrenched corruption.

The South African Government has kick-started its rescue efforts, reportedly increasing public borrowing to relieve two-thirds of Eskom’s debts.

With electricity generation essential for maintaining everything from the nation’s water supply and internet network, to fuel availability and food production, prolonged blackouts have the potential to spark a civil war.

A national state of disaster was declared on February 9, with the US Embassy and Australian Department of Foreign Affairs (DFAT) recently issuing warnings to its citizens to stock up on food and water.

The impact of electricity shortages is already being felt by businesses across all sectors as they grapple with transport bottlenecks.

ASX-listed miners with South African assets have not been spared as investors reduce their risk exposure.

West Wits (ASX: WWI) share price is down 45% year to date, while MC Mining (ASX: MCM) has fallen more than 17%.

AngloGold Ashanti CDI (ASX: AGG) has seen its share price fall by 12%.

Jupiter Mines (ASX: JMS) and Vanadium Resources (ASX: VR8) are two which have bucked the trend, recording modest share price increases of 6% and 3% respectively. 

As the nation attempts to resolve its power problem, will ASX-listed miners get an electric shock, or will a successful rewire spark a resurgence? 

More power to them.