South Africa's Eskom imposes first blackouts in six years

By Olivia Kumwenda-Mtambo and Ed Stoddard

JOHANNESBURG (Reuters) - The South African state power utility Eskom imposed rolling blackouts for the first time since 2008 on Thursday, forcing rail networks and banks to switch to emergency generators after heavy rains soaked power station coal supplies.

The blackouts, which Eskom said would last until 2000 GMT, come at a bad time for President Jacob Zuma and the ruling African National Congress (ANC), with general elections in two months.

Rolling power outages, called "load shedding" locally, caused misery for millions during an electricity crunch in 2008 that cost Africa's largest economy billions of dollars in lost output.

However, unlike in 2008, the rand took the outages in its stride, firming to 10.65 against the dollar, its strongest since mid-January, while the Johannesburg stock market's All-Share index <.J> hit a record high.

Eskom, which has been scrambling to build new power stations to ease its razor-thin supply margins, said it was reducing nationwide power demand by 4,000 MW, or around 10 percent of the grid's capacity.

It also said the situation was "not looking good" for Friday, with more heavy rain forecast.

Major industrial clients such as mines and smelters have been asked to cut their usage by 10 percent. Eskom's single biggest customer is the mining giant BHP Billiton .

Unlike in previous "power emergencies" declared in the last two weeks, Eskom was forced to impose blackouts on urban areas.

Generators roared into life in Johannesburg's Sandton financial district, and the high-speed Gautrain rail link between Johannesburg and Pretoria switched to emergency power, the operator said, adding that services were unaffected.

Executives from Exxaro , South Africa's second-largest coal producer, were giving a results presentation to investors in a building that also had to switch to a back-up generator.

But many small businesses did not have that luxury.

"We don't have power. Our computers are not working. At the moment we are not productive. We are just sitting," said Nelani Mashava, a tour consultant at a Johannesburg travel agency.

"The office is totally dark," she added. "We just have light from the windows."

Eskom said the grid had come under intense strain because of torrential rain in the eastern province of Mpumalanga, which had drenched coal supplies sitting outside power stations. Most of the utility's power stations are coal-fired.

The South African weather service forecast thunderstorms over the area until at least the middle of next week.

(Additional reporting by David Dolan and Ed Cropley; Editing by Kevin Liffey)