It’s carpe diem for SA miners as Govt. opens up the energy sector

Light bulb moment

AS South African miners try to ramp up output to sell into the post-pandemic commodities boom and meet intensifying investor demands for carbon-neutral operations, they are being frustrated by their dependence on Eskom’s stuttering, coal-fired energy infrastructure.

By mid-2021, only one company – Gold Fields – has received a licence for a renewable project above 10MW. It has passed all the regulatory hurdles needed for a 40MW solar project that will supply one-fifth of the electricity needs of South Deep Mine and reduce annual CO₂ emissions by about 100,000 tons/year.

In June, President Cyril Ramaphosa announced that the private sector would in future be able to self-generate (without going through onerous licensing requirements) up to 100MW. This was a bold and welcome step: double the 50MW that the mining industry had urged after the meagre 10MW cap gazetted in April by minerals and energy minister Gwede Mantashe.

The Minerals Council of South Africa, on behalf of its members, had argued that with a cap of 50MW, its members could launch 17 self-generation projects, 12 of which would be renewable projects with the potential to generate 1,600MW.

Gold Fields, however, managed to get its 40MW project through the system relatively quickly. It submitted its feasibility study to the regulator in June 2020, dealt with the regulator’s technical and legal teams through Covid-19 lockdowns, and was granted its licence on 25 February 2021.

Martin Preece, executive vice-president – South Africa of Gold Fields, says there were a couple of reasons it made rapid progress.

It strongly believed this was an important step, and looked for ways to make it happen. Gold Fields management sat down with Eskom and Nersa, the energy regulator, listened to their concerns and found ways to address them.

IPP complexity

Gold Fields also decided against the traditional IPP route, which involves bringing in a third party to build and operate the plant, because this would add a layer of complexity and costs. It decided it would self-fund and self-operate the plant, so South Deep gets the full benefit.

“One of the obstacles to getting a large self-generation plant approved can be that you want to sell or wheel excess power back to the grid,” Preece says. “The reason we designed our plant at 40MW is that it just covers our baseload requirement, including critical pumping and ventilation, with no surplus energy generated.”

Preece says batteries are not economically viable at present. South Deep’s solar power generation will normally taper off late in the day, and it will start to add 40MW of power demand to the Eskom grid, at Eskom’s period of greatest strain: the 5pm-8pm peak and 5am-8am.

“This was obviously a concern for Eskom, but we are looking at ways to mitigate our demand at these times, for example by scheduling maintenance activities then so we do not contribute to their surge in demand,” Preece says.

Other gold operations that are hoping to self-generate renewable power are Harmony Gold, with a 30MW solar project in the Free State, and Sibanye-Stillwater, with a 50MW solar project for its South African gold mines.

Pan African Resources has contracted juwi South Africa to build a 9.75MW solar plant to supply about 30% of the power at its Elikhulu tailings operations during daylight hours and save about 26,000t of CO₂ in its first year.

In the platinum sector, Impala Platinum (at Marula) and Northam (at its Zondereinde smelter) are planning 10MW solar projects. Royal Bafokeng Platinum is busy with a feasibility study on a 30MW solar farm at BRPM mine.

The bigger projects include Anglo American Platinum’s 75MW solar plant at Mogalakwena, a first step in what could ultimately be 320MW of solar generation. Sibanye-Stillwater is investigating an 85MW solar project for its Marikana PGM operations.

At Orion Minerals’ Prieska copper mine, it is considering a hybrid facility providing 20MW from wind and 35MW from solar PV, which would provide 52% of the mine’s energy needs and save 1.5M tons of CO₂ over its first 10 years.

Vanadium miner Bushveld Minerals plans to use its own minerals in a vanadium redox flow battery (VRFB) mini-grid at its Vametco mine, storing energy from a 3.5MW solar PV plant.
Preece says, in the long term, hydrogen will probably be the best power generation technology option for Gold Fields, but at this stage it is not commercially viable.

For the full story as it appeared in our 2021 Mining Yearbook, please visit the special ebook section below.