By Ed Stoddard and Victor Antonie
KATSE DAM, Lesotho (Reuters) - Cape Town is running out of water and low dam levels in the emerald-green highlands of Lesotho are raising alarm bells in South Africa's industrial heartland around Johannesburg, which has so far avoided the shortages hitting other regions.
The tourist hub of Cape Town may run dry in April and across South Africa water supplies have yet to recover from an El Nino-triggered drought two years ago, heralding potential water shortages that could hit industrial and agricultural output.
Nelson Mandela Bay in the Eastern Cape province has imposed water restrictions, dam levels are at worrying levels in the sugar-cane producing province of Kwa-Zulu Natal and a swathe of South Africa's maize belt has been hit by drought.
Deputy President Cyril Ramaphosa, who in December became head of the ruling African National Congress, has said the unfolding situation in Cape Town is a priority and officials are expected to announce contingency plans this week.
The next crisis may lurk in the mountains of Lesotho, a land-locked mountain kingdom encircled by South Africa.
Much of the water that supplies Gauteng, the province that includes Johannesburg, Pretoria and much of the South Africa's industry, flows from the Katse and Mohale dams in Lesotho.
According to South Africa's Department of Water Affairs, dam levels in Lesotho are "very low" - the worst ranking - and are in their 10th percentile, meaning levels have been higher more than 90 percent of the time at this point in the year.
Its levels are lower than at the height of the drought two years ago when the combined levels of the dams were at almost 50 percent capacity compared with 32 percent now.
Viewed from the winding road that climbs to Katse, the water level is about 20 meters (65 feet) below a water mark running round the sides of the dam.
Data compiled by the U.S. government's Africa Standardized Precipitation Index shows rainfall in Lesotho has been below normal for the past few months, exacerbating the after-affects of the 2015-16 drought.
Experts say water in the dams should ideally be used for storage, but Pretoria is now drawing from Lesotho as it continues topping up Guateng's Vaal supply system.
"At the moment we are using the whole system and that will remain until we see better rain," said Department of Water Affairs spokesman Sputnik Ratau.
"Going into the winter with the possibility of snow, we expect next summer we will see a recharge of the system."
The South African Weather Service is forecasting above-normal rain as the southern hemisphere summer progresses in the north-eastern regions, but says the outlook is uncertain for central areas that include Lesotho.
The overall picture for South Africa is worrying, with Cape Town the most urgent. Its residents, who will have daily limits cut from Thursday to 50 liters per person from 87 liters, face the grim prospect of the taps running dry.
The government has been urging people across the country to use water more wisely and cut consumption.
Nationwide, water storage levels are ranked by authorities as moderately low on a scale that ranges from high to very low and Lesotho's dwindling supplies are attracting attention.
Jason Hallowes, managing director of water research consultancy and software provider DHI South Africa, said Lesotho's water should not be used at the moment.
The Gauteng system in the northeast, where rainfall is seen picking up, could see flooding which would then waste water flowing down from Katse, he said.
"It would be more prudent to keep this water in these dams rather than release it. The most important dams supporting the system are Katse and Mohale," Hallowes said.
Ratau said the water department was "mindful and watching everything but we are not having palpitations about it at this stage".
Petrochemicals giant Sasol, which relies ultimately on Lesotho for backup supplies, said it was monitoring the situation in the mountain kingdom very closely.
"However, it is not an immediate concern for us since our primary source of supply is via Grootdraai Dam, which is currently above 100 percent storage capacity," Sasol said.
(Editing by James Macharia and David Clarke)