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Gold Fields' plans to build a 40 MW solar power plant at its South Deep gold mine southwest of Johannesburg will reduce exposure to national utility Eskom, improve reliability and lower costs, Martin Preece, executive vice president for South Africa, tells The Africa Report.
The project will make Gold Fields the first mining company in South Africa to build, own and operate its own solar plant on such a large scale, Preece says. The project, planned to be operational by mid 2022, addresses the "opportunity cost of lost production during frequent load curtailments"imposed by Eskom, he says.
Miners in Africa's most industrialised country have struggled with the impact of Eskom's power cuts. In May, Minerals Council South Africa CEO Roger Baxter said Eskom's performance is "one of the critical binding constraints to higher investment and economic growth."The council argues that Eskom does not have enough reliable electricity generation capacity to keep the lights on, let alone support higher economic growth.
Once completed, the South Deep plant has the potential to provide around 22% of the mine's average electricity consumption, meaning a cost saving of roughly R120m ($8.7m) per year, Preece says. The plant will cut the company's carbon footprint by 100,000 tonnes per year to 390,000 tonnes.
Key to any significant potential future expansion would be the relaxation of current arrangements to allow Gold Fields to feed excess electricity back into the Eskom grid, or take on other economically viable storage options, he adds.
Allowing miners the flexibility to generate their own power could revitalise an industry which has been lagging behind in the country.
Australia shows the way
Gold Fields is also considering building new solar plants outside South Africa. Its Ghanaian mines, Tarkwa and Damang, are currently studying renewable power options including solar. Currently, the mines have dedicated gas plants powering their operations and "given that gas is a low-carbon solution, we have a bit of time before implementing renewable options,"Preece says.
Gold Fields also operates mines in Australia and Peru, and plans to mine at Salares Norte in Chile.
South Africa needs to follow Australia's example. Research from Sandra du Toit of EY Corporate Finance in Johannesburg indicates that in 2020, Australia deployed new renewable energy 10 times faster per head than the global average. And, she argues, South Africa has better natural solar and wind power potential than Australia.
Renewable energy projects need to be fast-tracked by South Africa's regulators to protect both the mining industry and the environment.