Paving the way for large-scale renewable projects for African mines

MELODIE MICHEL, Reporter, Energy and Mines

Despite certain regulatory hurdles, African miners are actively pursuing renewable energy opportunities for their operations. David Manning, Director, Global Hybrid at juwi Renewable Energy, shares the company’s lessons learned from working on large-scale projects in Africa and beyond, and gives some insights as to what’s next for the mining industry’s energy transition.

David Manning: The mining industry currently has an estimated market cap of US$752bn. After another year of solid performance and confidence in the long-term market outlook, the Top 40 mining companies continued to invest in their future and focus on ESG. Capital expenditure increased for the second consecutive year, up 11% from 2018 to US$61bn. Capital projects were largely financed through cash generated from operations and debt financing. With hybrid and renewables becoming a standard energy solution in the mining sector, there is a significant opportunity for companies like juwi to continue to develop opportunities in Africa. PV, wind and storage are now a viable option for almost every mine site. In the last 12 months, there has also been a shift in the carbon reduction targets coming from boardrooms, where a number of top-tier miners leading the market (e.g. Rio Tinto, BHP, and others) have implemented ambitious plans for net-zero emissions by 2050. This has translated to a focus of mine development and operations teams on the deployment of renewable energy at their sites with the target of significantly reducing reliance on fossil fuels.

DM: Large-scale mining companies are now under pressure to set, track and report against environmental, social, and governance targets. Over the last few years, stakeholders have ramped up their expectations, and ESG is now a fundamental part of energy supply decisions. In January 2020, BlackRock, the world’s largest fund manager, said it would divest from any company earning more than 25% of revenue from thermal coal. It warned it would continue to evaluate sectors with high ESG risk and vote against management and directors who don’t meet its standards. Hybrid solutions with wind, solar, and storage are now well-proven, cost-effective and reliable. We don’t see a limit on the scale of projects. There are several large mining operations looking at hybrid solutions well over 50 MW, with renewable energy fractions in excess of 70%.

DM: COVID has made project development and execution a challenge over the last year. Getting to site, evaluating geophysics and putting together delivery schedules is difficult during times of uncertainty. In the South African region, NERSA regulations, whilst continuing to improve, are still a hurdle.

E&M: Can you provide us with an update on juwi’s project with Pan African Resources to construct its 9.975 MW solar project at Evander Mines?

DM: juwi South Africa has commenced construction on the project, with system design, procurement of key equipment and site works well underway. Engagement with Eskom for the grid connection infrastructure is advanced and going well. This will be another project that breaks down the NERSA barriers and will further reduce Elikhulu’s environmental impact . Pan African Resources are fully committed to producing highmargin ounces in a safe and efficient manner, while investing in local communities and minimizing the environmental impact of operations.

DM: The biggest issue facing mine sites and IPPs is the time and difficulty of obtaining a generation licence, particularly for projects over 10 MW. NERSA currently has over 2,000 MW of applications under evaluation. Recently Gold Fields received approval from NERSA for the construction of a 40 MW solar power plant at its South Deep gold mine in South Africa. This is a big step forward, and hopefully the first of many. Renewable energy options, including storage, will provide mine sites with a cheap and reliable energy source, that will ultimately lower cash operating costs, and provide better value to their shareholders

DM: The REIPPP experience has given juwi significant knowledge and skills to develop and deliver projects in challenging environments. Working with remote communities, connecting into the Eskom grid, and working with large-scale investors has not only been rewarding, but will allow us to undertake future projects with confidence and efficiency.

DM: As always, Energy and Mines provides an excellent platform for juwi to meet with our peers, discuss renewable energy options with potential clients and most of all, opens the door for the sharing of knowledge, in such a dynamic, and rapidly growing market. It has been interesting to see the list of attendees at Energy and Mines events growing over the last few years, and more importantly, seeing tier one mining companies not only attending, but contributing in many ways. There is little doubt that renewables will be the core focus for mining executives when making energy decisions.