Tuesday, May 5, 2015

How Can Mining Companies Help Supply Electricity to Africa?

A recent report from the World Bank, titled “Power to the Mine: A Transformative Opportunity for Sub-Saharan Africa” cited that mining companies could play a key role in harnessing Africa’s abundant energy sources to overcome the lack of electricity that reportedly affects one in three Africans.

Through the report, the World Bank called on the mining industry to collaborate more closely with electricity utilities in the region to meet their ever-growing demand for energy. In stark opposition to supplying their own energy on site, the report suggested that mining companies be customers of electricity utilities or independent power producers, which, in turn, could help the latter grow and develop better infrastructure to bring affordable electricity to more sub-Saharan communities.

The report found that the mining industry’s demand for power would approximately triple until 2020, to reach over 23,000 MW. To meet the year-on-year increase, the World Bank document reported that many mining companies had been opting to supply their own electricity through diesel generators rather than buying power from the grid because of shortcomings in the national power systems in the region.

The report advocated that if mining companies in sub-Sahara integrated with power utilities in the region, it would not only bring substantial savings to mines, but would also introduce electrification to communities and investment opportunities to the private sector. It called for the governments, power utilities and mining companies to work together to make such partnerships possible and, eventually, viable.

The success of such integration, however, may anchor on other issues more than working together. There is no doubt that such a proposal holds a tremendous potential: for mining companies to save on power costs, for utility companies to improve viability and for the population to benefit from an increased access to electricity. But, in order for such partnerships to reap the maximum advantages, power utilities in the region should be able to fully support the electricity demand of the mining industry, and to shoulder the eventual increments estimated in the coming years, and not at the expense of the energy supply allocation for the greater population.

As it stands, two-thirds of people in sub-Sahara live without electricity and even those who are connected to power sources suffer continual disruptions. Sub-Saharan Africa only generates 80 GW of power each year, and with the current rates of population growth and the persisting deficiency in investment in power infrastructure, the electrification rate may go lower than where it is now.

As the World Bank proposal gradually gains ground, supplemental power technologies can help regional power utilities supply the electricity required not only by the mining industry, but also by the greater population. Temporary power plants have the ability to replicate or supplement the functions of permanent power plants, be they coal, nuclear, hydro, solar, wind or running on other renewable energy sources. Large-scale rental power plants can be rapidly delivered from and to anywhere in the world, and can be installed and powered on in as short as a few days. As the permanent power sources are continuously enhanced, temporary power plants can fill in the gap in electricity supply in the short- or medium-term until the enhancements are completed. More importantly, rental power stations represent lower capital spending for electric utilities, which will be able to use their savings to fund other projects.

The World Bank proposition is advantageous on several fronts, but in order for it to be feasible, governments and utilities should take into consideration the current and the projected energy demand of the mining industry to have a more objective assessment of a country’s power situation and possibilities. They should be able to ensure that they can provide electricity to the mining industry without sacrificing the supply of energy towards the other industries and sectors of society. As of the moment, the integration may still not be organically possible, but with the aid of existing supplemental power technologies, the hurdles to its completion may gradually be surmounted.


Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505

No comments:

Post a Comment