Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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2019 INDABA REPORT MARCH 2019 • E&MJ 23 www.e-mj.com economy. "Mining is now only 7% of GDP. We want to see it raised to 10% over the next three to five years." Additionally, oil and gas that was origi- nally lumped under mining and subject to the charter will now be treated separately with its own legal architecture. South Af- rica is sitting on potentially billions of cu- bic feet of gas and oil, but exploration has been slow. This has largely been due to the chaotic legal environment. "With the sepa- ration of petroleum and mining, we expect oil and gas to become a significant part of South Africa's economy," Mantashe said. Power Problems Persist An outstanding issue to be addressed is South Africa's electricity utility Eskom, which provides most of the country's ener- gy. Currently, Eskom is a cool US$32 billion in debt, while struggling to keep up with demand for energy. Scheduled blackouts recommenced in February and, according to the utility, will continue to July at least. More alarming to the miners is that Es- kom is asking for a 17% increase in rates this year, followed by 15% for the next two years. Already electricity accounts for 30% of mining cost, according to the MCSA. Should this cost increase be implemented, many operators will shut down, the MCSA's Baxter warned. "I can guarantee that if Es- kom gets what it is asking for, there will be no more deep level mining," he said. Ramaphosa did announce in parlia- ment during the Indaba that Eskom would likely be broken up into three state-owned entities dealing with generation, trans- mission and distribution. Government said it would also support the institution financially, but gave no further details. Speaking on the sidelines of the Ind- aba, Mantashe conceded that Eskom's troubles may be too large to overcome, and that mining companies may need to provide their own electricity. "Renew- ables might also be part of the solution," Mantashe said. "Mines might have to start looking at alternatives, and generat- ing their own electricity." The idea of using own-generation elec- tricity using renewables is certainly catch- ing on. Saudi Arabian energy firm Altaaqa has held a stand at Indaba for a few years now. Lately, it is promoting hybrid power plants of 10 megawatts and up that in- clude conventional solar, thermal solar and even diesel as a backup. "It's a cost- effective way to reduce fuel consumption," said Jerome Sanchez, marketing specialist with Altaaqa. The idea is to use an array of solar panels to generate electricity during the day. These will naturally encounter intermittency issues, such as when clouds appear. This is when a thermal solar tower that uses the sun's heat to boil water and turn a turbine will then kick in. "Diesel is losing its attraction as a power source," Sanchez noted. "Solar uses less fuel, creates less pollution and needs less maintenance." Cause for Pause While the new era of glasnost between mines and the state has generally been welcomed, some warn that the ruling Af- rican National Congress will have to con- tinue its reforms if South Africa is to be The mood at this year's Indaba is upbeat as deals are once again in the offing.

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