May 19 (Bloomberg) -- South Africa, the biggest supplier of coal to European electricity companies, may limit exports of the fuel to ease a domestic power crisis under a plan ordered drawn up by Energy Minister Buyelwa Sonjica.

``The minister and director-general met today and instructed Nhlanhla Gumede, chief of hydrocarbons, to begin developing exactly that kind of strategy,'' Bheki Khumalo, a spokesman for the Department of Minerals and Energy, said in an interview today.

Sonjica issued the order after South Africa's energy regulator today said the government should investigate why state-run Eskom Holdings Ltd. exported double the power it needed to during a local electricity shortage that cost the economy about 50 billion rand ($6.7 billion).

``South Africa is struggling with their own supply and they want to supply Eskom first,'' Emmanual Fages, a Paris-based analyst at Societe Generale SA, said by phone today. ``It will restrict supply and exports from a major producer.''

Eskom declared force majeure on Jan. 24, saying it couldn't guarantee supply and halting production of gold and platinum for about five days at most mines in South Africa, the world's biggest precious-metals producer.

The utility exported 1,319 megawatts that day, compared with a contractual commitment of 554 megawatts, the National Energy Regulator said in an enquiry into the power crisis in Africa's biggest economy. Facility breakdowns, low coal stockpiles and the slow return to service of mothballed plants led to the crisis, it said.

Force Majeure

``The decision to export power to neighboring countries above the firm contractual levels during power-system emergencies needs to be explained,'' said the Pretoria-based regulator in a report published on its Web site today.

Most export commitments ``are not firm contracts,'' Johannesburg-based Eskom said in its response to the findings, annexed to the regulator's report. Fani Zulu, a spokesman for the utility, wasn't immediately available to comment when Bloomberg News called his Johannesburg office.

``There's a general mis-planning, a shortsightedness, at Eskom,'' Fanie Joubert, economist at Efficient Research, a Pretoria-based research group, said by phone today.

Eskom, which blames the power crisis partly on a four-year delay in getting government approval for planned expansion, has said it will need to curb supply until at least 2012. Today's report comes three weeks before the regulator unveils a decision June 6 on whether to approve a 61 percent increase in Eskom's tariffs this year and 43 percent in 2009 to fund new capacity.

`Inadequate and Slow'

While the company anticipated increasing demand for power in South Africa, the actions it took to boost supply have been ``inadequate and slow,'' according to the report.

South Africa should also investigate ``complacency'' and ``poor'' management in Eskom's coal purchases and draw up a national plan for acquisition and management of the fuel to ensure security of supply, the regulator added.

Eskom missed its own target for increasing coal stocks to a minimum of 20 days of use by April 30, raising the risk of power cuts with the onset of winter in the southern hemisphere. Stocks were at 16.2 days on May 14 after dropping below 10 days in January, when heavy rain further depleted stocks.

The regulator recommended the government set up a unit independent of Eskom to buy power generated by industrial companies and other producers. South Africa may have to change rules forcing companies to sell electricity to Eskom, it said.

Steelmaker ArcelorMittal South Africa Ltd. and paper maker Mondi Ltd. are among companies considering building power plants.

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.netVernon Wessels in Johannesburg at vwessels@bloomberg.net

Last Updated: May 19, 2008 12:42 EDT