By Paul Simao
CAPE TOWN (Reuters) - South Africa will overcome anelectricity "emergency" that has damaged the economy and castdoubts over its hosting of the 2010 soccer World Cup, PresidentThabo Mbeki said on Friday.
In an annual state of the nation speech to parliament,Mbeki sought to calm fears among local and foreign investorsover the power crisis which last month forced gold and platinummines to shut down for five days.
South Africa is a leading world producer of both metals andthe lack of capacity pushed global prices to record highs. Therand currency has fallen 12 percent this year.
"We face an emergency but we can overcome the problems in arelatively short period," Mbeki said.
"We are a minerals-resource economy. We must thereforecontinue to support the mining industry."
Tourism authorities have raised fears the power crunch,caused by a failure of electricity generation to keep up withthe expansion of Africa's biggest economy, would endanger thestaging of the 2010 World Cup.
"I have absolutely no doubt that we will honour ourundertaking to (soccer's governing body) FIFA and the worldcommunity of soccer players and lovers to create all thenecessary conditions for the holding of the best ever ...soccer World Cup tournament," Mbeki said.
It was Mbeki's first state of the nation speech since hewas toppled from the leadership of the ruling African NationalCongress in December by his rival Jacob Zuma.
Mbeki is trying to deflect suggestions he will be a lameduck president until the end of his term in 2009 as Zuma boostshis power by appointing his allies to key party posts.
Investors are concerned about a divided power structure inSouth Africa because of the split, and possible clashes betweenstate president and head of the dominant party.
"Those hoping for concrete details on how the governmentwill tackle the electricity crisis are likely to have been alittle disappointed, with a lot of talk on energy efficiencyand little substance," said Nicholas Kennedy of market analysisfirm 4castweb.
In his speech, Mbeki said his government would maintain itsfiscal policies to support economic growth and he had budgeted2.3 billion rand ($296 million) for industrial projects.
He planned 5 billion rand in tax incentives over threeyears to support the industrial programme.
(Reporting by Paul Simao; Writing by Barry Moody)
