Modern Mining February 2020

MINING INDABA REVIEW

The announcement of the forthcoming legislative amendments by Mineral Resources and Energy Minister Gwede Mantashe at Investing in Africa Mining Indaba 2020 – which would allow mining companies to generate their own power without licences from the regulator – received the plaudits of the industry. However, there is need for clarity on what would be required under energy laws to see this to fruition. By Munesu Shoko . Unpacking the proposed

I ncessant power outages in South Africa have put mines under increas- ing pressure to stay afloat, amid production decline and constrained commodity prices. However, many industry players were left encouraged by Minister Mantashe’s acknowledge- ment of the electricity constraints and the subsequent outlining of measures being considered to address the elec- tricity supply challenges. Addressing delegates at Investing in Africa Mining Indaba 2020, Mantashe acknowledged that eco- nomic growth and sustainability are bolstered in an environment of secure and reliable electricity supply.

As part of measures put in place to address power challenges, Mantashe said in October last year the government gazetted the Integrated Resource Plan (IRP) – the country’s blueprint for long-term electricity generation options, which provides for a diversified energy mix. “Following concurrence by energy regula- tor, NERSA, we are currently gazetting a revised Schedule 2 of the Electricity Regulation Act, which will enable self-generation, and facilitate municipal generation options under ‘distributed generation’. This will help close the energy gap caused by dete- riorating Eskom plant performance. Depending on the circumstances, the generation plant may only require registration and not licensing,” he said. Furthermore, he said in December 2019 the government issued a Request for Information (RFI) – inviting responses from the market on workable potential solutions to deliver power generation to the grid as expeditiously as possible. “We wel- come all inputs from the market. These will give the Department a sense of possible immediate genera- tion options available in the next three to 12 months to fill the short to medium term gap,” he added. Encouraging announcement The Minerals Council South Africa says it is encour- aged by government’s commitment to rapidly and significantly increase generation capacity outside of

Mineral Resources and Energy Minister Gwede Mantashe addressing delegates on the first day of Investing in Africa Mining Indaba 2020.

Roger Baxter, CEO Minerals Council South Africa.

Eskom. “The government’s acceptance that power, especially for self-use, can play a critical part in addressing Eskom’s troubles means that mining companies will hopefully soon be able to generate their own power,” says Roger Baxter, CEO Minerals Council. He adds that the mining industry already has a pipeline of energy projects totalling about 1,5 GW that could be brought on stream in the next nine to 36 months. In his keynote address, Mark Cutifani, CEO of Anglo American, said load shedding hinders produc- tivity, impacts the functioning of critical equipment and creates safety risk for people on site, especially in underground operations. “We are very supportive of the South African government’s efforts to deal with the structural problems at Eskom,” he said. “And there is no better place to start than by

14  MODERN MINING  February 2020