logo

Power squabbles at #MiningIndaba2020

PUBLISHED: Mon, 03 Feb 2020 21:07:58 GMT

Share

By Chris Bishop, in Cape Town.

The first day of the Mining Indaba in Cape Town saw hustle, bustle and a sharp exchange in the struggle for power.

Mining companies and South Africa’s Mining Minister Gwede Mantashe’s team clashed over how the mines are going to power their future in the face of power cuts and production losses. The Minerals Council South Africa – which represents the country’s biggest mines – claimed that power had cost production leading to a 2.8 % drop in contribution to GDP, in 2019, despite an uptick in commodity prices. Mining still contributed 8.1 % to GDP last year even though costs rose at 3% above inflation.

[WATCH] #MiningIndaba2020: These are the biggest constraints to SA’s mining industry

Solving these costly power cuts is causing tension between the mining companies and government.

The MCSA fired the first salvo at its traditional breakfast briefing on the first day of the indaba. The mining companies said they wanted government to stop bailing out loss-making parastatals and put the money into solving infrastructure problems like the dearth of power.

“At last this is being seen as a country problem and not a mining problem,” said Roger Baxter the CEO of the MCSA.

“What we want to see is action, action, action.”

[WATCH] #MiningIndaba2020: Roger Baxter on why self-generation is a game changer for SA mining

The MCSA has a list of power projects, including wind and solar, that it claims can create more than 2000 MW in nine months. The only problem is, says Baxter, is that it takes a raft of expensive and lengthy bureaucracy, including registering a change of use of land and paying to connect to the national grid.

At a press conference hours later Mantashe vowed to make it easier for miners to create their own power projects but warned.

[WATCH] #MiningIndaba2020: : SA mines to be allowed to self-generate – Mantashe

“We have to be sure about projects and be certain they comply and do not destabilise the national grid. We do not want a free for all,” says Mantashe.

“We want to know who you are and how much you will spend.”            

Mantashe argued that solar power was not yet “cheap” as many claimed. He also questioned the major mines hunger for new self –generated power.

“Sibanye was granted permission for a 50 MW in 2017 and they didn’t go. They didn’t go,”Mantashe said pointing his finger at his questioner for emphasis.

James Wellstead, the spokesman for Sibanye, confirmed that the 50 MW project hadn’t gone ahead because of complications and a desire to create a 150 MW project instead. 


Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.

RELATED