Mining companies are stepping up efforts to switch their operations to renewable energy to overcome the crippling national power shortage and reduce their carbon footprint, according to their representative body.
Minerals Council SA is working closely with the government to unlock more than 4.2GW of energy projects worth R65bn by member companies, CEO Roger Baxter said after the council's annual meeting this week.
“There is an ongoing look at each of the different components of what is constraining our ability to get new projects on stream,” Baxter said.
Besides Eskom’s lack of generating capacity, it can take as long as 24 months to get environmental authorisation for alternative energy projects, though a focus group in the presidency is looking at ways of speeding up the process, he said.
“It used to take 210 days to get an Eskom grid arrangement,” Baxter said. “The Eskom leadership team and CEO have committed to halving that time to make sure the process happens a lot quicker, and the department of mineral resources & energy, through Nersa [the National Energy Regulator of SA], has committed to completing the registration or licensing within two months.”
Nersa registered two 100MW solar PV projects for Tronox Mineral Sands in the North West this month, which are being financed, built and operated by the Sola Group and its partners.
These are the first 100MW projects to be formally registered with Nersa since amendments to the Electricity Regulation Act cleared the way for projects of that scale to be implemented without a generation licence.
Over the next few years we are implementing about 525MW of renewable energy. We will always be reliant on Eskom but it is also part of our decarbonisation strategy
— Sibanye-Stillwater CEO Neal Froneman
Mining companies are pushing to accelerate plans to generate their own power even though stage 3 load-shedding has a limited impact on them.
Sibanye-Stillwater CEO Neal Froneman said at the company’s AGM this week that South Africans had learnt to live with load-shedding, and Sibanye had significant flexibility to manage the power shortage.
“Over the next few years we are implementing about 500MW of renewable energy ... based on photovoltaic and wind. That will make us less reliant on Eskom. We will always be reliant on Eskom but it is also part of our decarbonisation strategy,” he said.
Impala Platinum spokesperson Johan Theron said the group has “load curtailment” agreements with Eskom whereby, given enough notice, it can reduce its power demand through operational adjustments.
He said the group’s Rustenburg operations, which account for most of its local production, had lost about 54,000t of mineral output since January, the equivalent of about R200m in revenue, as a result of load-curtailment calls and power dips.
“The impact on our operation is directly related to the frequency and severity of ongoing load-curtailment. Up to stage 3 we are able to offset material impact, however, from stage 4 onward we are impacted disproportionately, with workers not able to proceed underground.”
Theron said the group was prioritising renewable energy projects under its decarbonisation strategy to reduce its consumption of coal-based power.
“However, as a very large energy consumer, we will remain reliant on the Eskom grid for the foreseeable future.”
He said feasibility studies were being carried out for several renewable and thermal (gas-to-power) energy projects to assess the costs, location, size and carbon emissions.
Pan African Resources spokesperson Hethen Hira said the continuing threat of inconsistent power supply and above-inflation cost increases were affecting the group’s planned production rates and cost profile.
“Work stoppages through lack of power also affect reliability of electrical equipment, and shifts have to be managed carefully to avoid work stoppages underground,” Hira said. “The purchase of backup power supply generators and fuel also adds to our cost pressures and to those of our suppliers.”
Still, careful planning had helped alleviate the impact of load-shedding at the group’s operations, he said.
“We have minimised disruptions ... by scheduling hoisting and other energy-intensive activities during off-peak periods. Production therefore was not greatly impacted, although a consistent power supply would have improved efficiencies and reduced production costs while also increasing gold production,” Hira said.
Pan African recently announced the commissioning of a 10MW solar plant at Evander, the first of this scale by a mining company in SA.
They do not just switch us off like they do with other customers because big mining kits do not like simply being switched off
— Minerals Council of SA CEO Roger Baxter
“It is our initial mitigation measure and will be followed by expanding this facility by a further 12MW to supplement supply to our underground organic growth projects at Evander,” Hira said. “Construction will soon commence on an 8MW solar renewable energy plant at Barberton Mines, where a feasibility study on expansion of this facility is also being seriously considered.”
Gold Fields said a 50MW solar plant at its South Deep operation will start operating in the third quarter of this year. Spokesperson Sven Lunsche said that once operational, the project would represent 24% of South Deep’s annual electricity consumption. Operations would default to the national grid at night.
“The operation will save the company more than R123m a year and reduce carbon emissions by more than 110,000t of CO² a year,” Lunsche said. “In the longer term, as storage solutions become viable, we will explore expanding the solar project, looking at wind power and installing storage capability to further reduce our reliance on the [national] grid.”
Eskom started load-shedding 15 years ago as its ageing and poorly maintained coal-fired plants battled to meet growing demand for power.
Minerals Council SA vice-president Paul Dunne said at the body’s AGM that, in general, mines can cope with load-shedding up to stage 4 without compromising the underground operations.
“All mining companies are different, of course. In general, we help ourselves up to that level. Beyond stage 4 — and thankfully we have not been there in recent times, at least — it will become very difficult for mining companies to cope. It would then impact underground operations directly,” Dunne said
Baxter said that while stage 4 load-shedding was a serious issue for mining companies they were able to manage the situation by receiving notifications from Eskom should there be a need to reduce consumption.
“They do not just switch us off like they do with other customers because big mining kits do not like simply being switched off. It has got to be managed with our electrical engineers playing a key role to manage this process,” he said.
The power shortage has seen SA drop to 75th position out of 84 jurisdictions in the latest Fraser Institute's Investment Attractiveness Index. It was ranked 60th out of 77 in 2020 and 40th out of 76 a year earlier.
Mineral resources & energy minister Gwede Mantashe said at the council AGM this week that the Fraser survey required detailed analysis by all partners in the South African mining industry.
“We must collectively attend to the low rating of our country on investment attractiveness, attributable to external factors that adversely impact on the industry; that is, power outages, operational inefficiencies at ports and cable theft,” he said.
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