[miningmx.com] – SIBANYE Gold said it was considering building a R3bn solar-powered plant in response to load-shedding implemented by Eskom and a lift in power costs as a percentage of operating costs to 20% from 9% in 2007.
It was also examining the feasibility of a coal-fired plant generating up to 600MW which would exceed its overall 500MW power demand. The solar powered station would generate 150MW providing around 10% of the firm’s electrical energy requirements when averaged over the course of a day.
Commenting on the solar plant – termed a solar photovoltaic generating plant – Sibanye CEO, Neal Froneman, said a site had been identified near its Driefontein mine which is west of Johannesburg.
“We intend to submit permitting applications early in 2015, and anticipate that we will be able to start independent generation of captive electricity for our operations during 2017,” he said in notes to the group’s fourth quarter and year-end results.
Commenting on the coal-powered station project, he said the group would need to ensure reliable quality coal sources as an integral part of the plant’s feasibility. “We are also engaging with technology partners in order to develop a deeper insight into
independent power generation,” he said.
“It is our intention to become fully independent of Eskom over the next few years, as this will make a material difference to production costs,” he added. Increases in the power tariff charged by Eskom were described by Sibanye as ‘punitive’ despite. Sibanye had reduced consumption of electricity by 20% since 2007.
He added that while Sibanye had the capacity to fund R3bn, this was the least preferred option in favour of speaking to institutions and developmental finance organisations that specialised in infrastructure and green energy related projects.
“Our undertaking is to provide the power offtake. We will be talking to independent power producers,” said Froneman, who added that the coal power project was still a “conceptual project”.
Sibanye Gold reported a hefty 38% decline in full-year headline earnings to R1.42bn compared to the previous year owing partly to a R330m share of losses reported by Rand Refinery in which Sibanye Gold is a shareholder.
Normalised earnings, which strip out the exceptional and non-recurring items from the company’s books, such as the Rand Refinery charge, were 3% lower year-on-year at R2.3bn. Dividends are calculated from normalised earnings.
Given that normalised earnings were barely unchanged year-on-year, and production is due to be higher in the current year – 1.61m ounces to 1.67m oz – (2014: 1.59m oz), while all-in sustaining costs are estimated to be lower – the group raised the dividend 22%.
The outcome was a R1bn payout to shareholders or some 112 South African cents per share, equal to a dividend yield of 3.7% as of February 18.
