South Africa’s mining industry – which consumes almost a third of Eskom’s power supply – wants to free up more energy for the rest of us

 ·13 Jul 2022

More companies are targeting a move away from Eskom’s grid as the country endures more rolling blackouts for longer periods – costing time and putting a strain on production.

One of South Africa’s largest sectors – the mining industry – aims to reduce its consumption on the national power grid by as much as 30% by creating approximately 73 self-generation projects.

Financial services company, Deloitte notes that energy is one of the biggest expenses for mining companies – constituting approximately 30% of total cash operating costs.

Mining companies have a significant opportunity to use renewables to lower costs, improve safety, reliability and sustainability, and mitigate risks, it said.

Speaking to ENCA, technology analyst Christian Teffo from the Minerals Council South Africa said rolling blackouts have damaged mining infrastructure, resulting in the loss of millions and threatening the security and safety of 2,000 miners underground.

The country has seen increased load shedding in recent weeks, to a point where Stage 6 has become the norm. This level sees 6,000MW of load being removed from the grid for around six hours each day, or 18 hours every three-day cycle.

Teffo said that load shedding is costing the industry – which employs nearly 460,000 people and adds 8.4% or R500 billion to GDP – dearly in terms of lost investment and production.

To counter this, he said that the industry is targetting 5,100MW of renewable energy to come online. He said that this energy security through a mix of wind and solar, will enable Eskom to maintain its plants better, and help drive down energy costs for the mines, opening funds for further production, exploration, and in turn, jobs.

The council said in January that its member companies have a pipeline of 3,900MW of potential renewable energy projects worth more than R60 billion that would, when implemented, substantially contribute to bridging the country’s large electricity supply deficit, diversify the country’s supply, reduce the sector’s carbon footprint, and stabilise mining costs.

“Our strategy is to work hand-in-hand with Eskom and not to kick them out of business,” he said. “We still need them in the evenings, the coal-powered stations are helping the mines to carry on.”

Industry players are set to bring roughly 5,000MW online by 2025, with gold producer Pan African Resources already producing 10MW, Gold Fields set to add an additional 50MW and Harmony Gold aiming to produce 38MW, said Teffo.

Changes within companies

South Africa’s biggest gold mine, Gold Fields’ South Deep, is switching to solar power later this year, the group said in May, saving R123 million in electricity costs, lowering its carbon footprint, and mitigating load shedding disruptions.

The plant was initially planned to have a capacity of 40MW, but four months after Nersa’s approval, the South African government increased the embedded generation threshold to 100MW. Following an additional optimisation study, Gold Fields increased the plant’s planned capacity to 50MW, with the potential to expand to 60MW.

“The country’s mining industry consumes up to 30% of Eskom’s annual power supply, according to Minerals Council South Africa. Decreasing its reliance on Eskom will effectively free up more energy for the rest of South Africa, and high-capacity renewable installations could keep mines operating during severe rotational cuts,” it said.

South Deep’s Khanyisa solar power plant will consist of more than 100,000 photovoltaic (PV) panels and, occupying an area of 105ha or roughly 200 soccer fields. When fully operational, the plant will account for 24% of South Deep’s annual electricity consumption.

The plant, which will cost Gold Fields around R715 million to build and operate, is expected to come online in the third quarter of 2022.

Pan African Resources has commissioned a solar energy plant and said it is on track to produce around 10MW of renewable energy at its Evander mines in Mpumalanga.

The company has taken steps to expand the plant to 21.98MW with plans for more energy plants to be completed across the country.

In June, Harmony Gold Mining Company said it concluded a new syndicated multi-tranche, multi-currency, loan facility, aimed at sustainable development, as well as a power purchase agreement (PPA) facilitating Phase 1 (30 MW) of its renewable solar photovoltaic energy initiative.

The first phase of Harmony’s renewable energy journey consists of a 30MW solar energy plant in the Free State. In Phase 2, the company said it will build an additional 137MW of renewable energy at its various longer-life mines while Phase 3 is in planning stage and “is progressing as anticipated”.

Harmony expects Phase 2 of its renewable energy project to deliver over R500 million per annum in electricity cost savings once it reaches full production in 2025.

Read: Eskom updates load shedding plans – here is the new schedule for the week.

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