Mining companies can generate own power without licences - Mantashe

Minister of Mineral Resources and Energy Gwede Mantashe told delegates at the Mining Indaba in Cape Town on Monday that government had conceded that it must allow mining companies to produce energy for their own use. 

Mantashe was delivering the opening address at the annual Investing in African Mining Indaba in Cape Town. His remarks echoed sentiments from an address he made on Sunday evening about power generation, which were roundly welcomed by leaders in the mining industry. 

He said while global economic growth was estimated to rise from 2.9% in 2019 to 3.4% in 2021, South Africa’s projected economic growth for the year ahead was expected to again fall under 1%, owing to structural constraints and power outages.

“These realities force us to take serious decisions. That’s why we have agreed that because we have problems with energy, we must allow our mining companies to create energies for self-use. You will not need a licence for that, you just generate for self-use and you run ahead,” he said. 

Mining companies, by producing their own energy, would be easing pressure on ailing power utility Eskom. Eskom on Monday said that power outages would continue until 6am on Thursday. 

“As Eskom continues with the problems, we must have a fail-safe. We must continue to ensure that we get back to the days when we have a surplus of energy and when we get back to that the price of electricity will be pushed down,” Mantashe said.

Minerals Council of South Africa CEO, Roger Baxter, welcomed Mantashe’s commitment as an acceptance that private power, especially for self-use, could play a critical part in addressing Eskom’s troubles.

Baxter said mining companies originally had a figure of 609MW of projects in the pipeline for self-use energy. This had grown to about 1.5GW of projects that could be brought on stream in the next nine to 36 months.

Earlier on Monday at a media briefing, Baxter said the Minerals Council had already had two meetings with new Eskom CEO Andre de Ruyter. He said the council had also had multiple meetings with Mantashe where energy was discussed.

"We fully recognise that Eskom needs to be effectively load shedding for two years at about stage 2, which for mining is a disaster," he said. "We have had tough conversations with Minister Gwede Mantashe."

The mining indaba is set continue until Thursday. 

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