BHP Billiton Ltd., Xstrata Plc and other companies operating in South Africa must brace themselves for another eight years of power cuts and a jump in prices, said Jacob Maroga, chief executive officer of Eskom Holdings Ltd.

``It's a tough pill to swallow, but it's reality,'' said Maroga, whose company supplies almost all of South Africa's power, in a Nov. 1 interview. ``The fundamental problem is growth.''

The economy is growing close to its fastest rate in 21 years. The platinum and ferrochrome industries, the world's biggest, are expanding and demands that Eskom roll out supplies to black households denied power during apartheid have combined to cause power outages across the country. The fact that Eskom hasn't opened a major plant for a decade isn't helping.

Electricity demand has increased 50 percent since apartheid ended in 1994, while government indecision has postponed Eskom's five-year, 150 billion-rand ($22.8 billion) expansion program. That delay may stall expansion at some companies.

``It's a real concern,'' said Jasper Pieters, operations director at Mitsubishi Corp.'s Hernic Ferrochrome Ltd., the world's fourth-biggest producer of the stainless steel-making raw material, in a Nov. 5 interview. ``I don't know where all the power is going to come from.''

Already the outages are having an effect on the economy, cutting growth by as much as 0.4 percentage point this year to 4.8 percent, according to Dawie Roodt, chief economist at the Efficient Group in Pretoria.

Blackouts

With power supplies to households likely to be a priority ``this leaves less electricity for industry,'' Roodt said. ``The impact could be quite severe for economic growth.''

At times last month, Eskom had a quarter of its 37,678- megawatt capacity out of action because of maintenance and unexpected outages. For a three-week period, BHP, the world's largest mining company, had power interruptions to at least one of its southern African smelters on most working days and companies including AngloGold Ashanti Ltd., Gold Fields Ltd., Xstrata and Hernic agreed to cut power use in exchange for compensation.

``The compensation is adequate but we'd rather produce,'' Pieters said.

That didn't prevent blackouts in parts of Johannesburg, the country's biggest city, and other towns.

South African Reserve Bank Governor Tito Mboweni says that an application by Eskom to raise its tariffs by 18 percent, compared with an inflation rate of 6.7 percent, may also lead to higher interest rates, which he has already raised three times this year.

``It will just add fuel to the fire,'' he told businessman in an Oct. 31 speech. Eskom says it needs the money to finance expansion.

Declining Surplus

During apartheid, the government rapidly expanded the network of mainly coal-fired power plants, leading to a surplus of power that resulted in some plants being mothballed and the completion of the last large plant to be opened in South Africa, Majuba, delayed by a decade to 1996.

That surplus was healthy until at least 2001 when Eskom's so- called reserve margin, a measure of the gap between total generating capacity and demand, was 25 percent compared with an international norm of about 15 percent, which allows for maintenance and unexpected closures.

That margin is now below 10 percent and may fall to less than 7 percent ahead of the opening of a 4,200-megawatt coal-fired plant in 2011, Maroga, 47, said. The opening of smaller natural gas-fired plants in the interim won't have much impact.

``It is likely to get worse before it improves,'' he said. ``We anticipate that we will be in a tight situation for the next five to eight years.''

Enron Aftermath

Eskom's plans to expand were put on hold by the government, which had wanted to encourage private, foreign investment in the industry. Those plans coincided with the aftermath of the collapse of Enron Corp. and its impact on the world power industry.

``The people we anticipated had the appetite didn't have the appetite because they had problems at home,'' Maroga said.

Now Eskom is failing to keep pace with demand, which rose at an annual rate of 4.5 percent in September, compared with a 3.6 percent increase in electricity generation.

While there are plans to buy more power from nearby African countries including Botswana, Namibia and the Democratic Republic of Congo, plants planned in those countries are years away from opening. In a bid to rein in demand, Eskom is asking consumers to switch off boilers during times of peak demand, encouraging the use of more efficient light bulbs and subsidizing boiler insulation and solar powered water heaters.

In addition to rolling out power to more households, adding to the 3.3 million connected since 1994, Eskom is expected to cope with Anglo Platinum Ltd.'s plans to open new mines and the ferrochrome expansion plans of Xstrata, the Tata Group, International Ferro Metals Ltd. and Samancor Chrome Ltd. It has also agreed to supply a new aluminum smelter being built by Alcan Inc. It will be a tall order.