PIERRE BEKKER | Mining sector looks at alternative energy sources

The mining industry in SA is a significant contributor to the country’s economy, employing more than 450,000 people and accounting for 7.5% of the GDP in 2022.  With operations valued at more than R1-trillion and nearly 500,000 employees, mining activities consume a tremendous amount of energy.

The mining sector is responsible for consuming about 14% of Eskom’s electricity production, which is becoming increasingly problematic for mining operations given the unreliability of SA’s power grid. With mining organisations now desperately seeking freedom from grid reliance, there is now a total pipeline of  9GW (gigawatts) of energy projects in solar, wind and gas, and in battery storage planned by the private sector.

Of this, 7.5GW is planned for the mining industry alone at a cost of more than R150bn. Given the urgency of the crisis, the private and mining sector must ensure the necessary labour component and skills are readily available to set up operations rapidly and effectively. Here, a Temporary Employment Services (TES) provider can ensure that unnecessary delays are avoided and that projects are rolled out to actualisation, within budget.

Not only is there an 18.65% electricity price hike looming this year, and a 12.74% increase next year, but the power supply is becoming increasingly unreliable, with rolling blackouts becoming the norm. SA’s electricity crisis hits the mining sector particularly hard, given that processing, smelting, and refining plants need absolute energy certainty, particularly in mining activities that send employees underground to ensure they can safely return to the surface.

Any further disruptions to or deterioration of the power grid could severely limit mining operations and expansion at a time when global commodity prices have peaked.

One of the most effective ways to ensure power security for mining and reduce reliance on the national grid would be to build renewable power production plants on-site to avoid productivity losses during blackouts.

With 7.5GW of such renewables projects planned by the mining sector at a cost of more than R150bn, and the Minerals Council estimating that 3GW needs to be completed by the end of 2024, there is little room for error or delay. But when planning, implementing, building and running renewable power plant projects is not their core business, where can mining houses (and the rest of the private sector) turn to for assistance to ensure that project deadlines are not unduly delayed, and budgets are not overshot?

Mining companies can secure the completion of their much-needed alternative power projects by engaging with a TES provider, as early as possible. By involving a TES provider in the initial stages of a project, such as the conceptual stage, independent power producers can reduce stress and improve outcomes by conducting a pre-mortem analysis to assess, plan and mitigate risks before project implementation. This approach ensures that the project begins with a success-driven mindset, rather than conducting a post-mortem analysis after project failure.

Furthermore, the positive effect of such renewable energy projects on the economy and the communities in which mines operate will be immense, particularly in driving socioeconomic development linked to sustainable ventures. This makes it essential for mining and private sector organisations to partner with TES providers that can handle every aspect of their project, including community stakeholder engagement, enterprise supplier development, skills and labour force management.

Partnering with a TES provider that has a national and international capability footprint can provide the mining sector with immeasurable benefits, including logistics, skills, and procurement support, as well as the TES partner’s investment in the project outcome. This makes a TES provider an integral part of the project’s organisational structure, with the ability to drive best practices .

By carefully selecting their TES partner and leveraging their expertise, mining companies can cover all aspects of the power project, effectively mitigate risk, and set themselves up for a successful outcome.

Pierre Bekker, Director at Quyn International Outsourcing