Africa’s Mining Industry Preps for Coming Growth

The year 2016 was a breakout year for mining, as the industry witnessed the advent of the initial signs of its recovery. The industry marches on to 2017 with renewed energy and confidence, all set to ride the coming growth wave. Is the cycle of uncertainty really over for mining? Majid Zahid, Altaaqa Global, in a free-wheeling conversation.

Majid Zahid, Chief Commercial Officer, Altaaqa Global

The year 2016 was a pivotal year for the global mining sector. 

Last year, the industry saw nascent signs of recovery and growth, spurred by strengthening commodity prices, revitalized exploratory activities, and re-engineered operational and financial strategies. 

The industry, therefore, rings in 2017 with heightened optimism and a fervent hope that the much-anticipated next growth wave finally comes. 

The wait may be over, as the green shoots are gradually emerging: Commodities has returned to a bull market and many mining companies are seeing a consistent recovery in value. In fact, 2017 is touted to be an encouraging year for mining stocks, buoyed by increased free cash flow, positive earnings momentum and the prospect of distributing excess capital to shareholders. 

Indeed, mining’s recovery was never a question of “if”, but rather of “when”. And for many mining industry players, the “when” starts now. 

“From the standpoint of a power solutions provider”, says Majid Zahid, Chief Commercial Officer of global multi-megawatt temporary power provider Altaaqa Global Caterpillar Rental Power, “we observe that the industry, together with its allied stakeholders, is actively preparing for the growth cycle at hand. 

“For example, an increasing number of mining companies have resumed funding new and expansion projects in the interest of capitalizing on the expected upturn. Investors are once again enticed to finance various segments of the industry, riding high on its impressive showing in 2016.”

Zahid also notes that governments have ramped up their support for mining companies in terms of exploring local and cross-border opportunities by allocating significant funds for mining activities and eliminating obstacles in doing business.

“Looking at the trend,” says Zahid, “the next few years may see the establishment of new mines and the expansion of a number of existing mines. Then, more than ever, electricity will be essential in powering their operations.

“Be they nascent mine sites or established mine operations looking to grow, our multi-megawatt temporary power plants will be able to satisfy their power demands. Our power plants are scalable so they can provide the exact amount of electricity needed by mine sites of any size.”

Zahid says that temporary power plants also represent an excellent choice for mining companies looking to explore new opportunities in remote sites. “Rental power plants can be delivered and installed anywhere in the world, so mining companies can rest assured that wherever they are, we can provide them power.” He says that the latest rental power systems have cutting-edge technologies that allow them to shift operational mode in minutes, and to directly connect to the grid even if sub-stations are absent. 

He, however, sounds a caveat. “Though the industry appears to be on its way to recovery, mining companies should still, to a certain extent, practice caution, especially in terms of utilizing their capital.”

Zahid endorses the view that turning to temporary power plants cushions mining companies from making huge investments in permanent infrastructure, like power generation facilities. “For a mining company, it may not make sense to make an outright investment in a permanent power plant, especially during the formative stages of a mine or the initial phases of a mine development or expansion. These are crucial times in a mine operation when its future of is still uncertain.” 

Zahid says that by choosing to rent power during these stages presents a win-win situation for mining companies. “When the operations grow, they can choose to add modules to the temporary power plant to increase its capacity. In case the project proves unsuccessful, the rental power plants can be easily demobilized, leaving no permanent system unutilized or that will need constant maintenance or repair.”

Altaaqa Global Caterpillar Rental Power is presenting the latest technologies in rental power generation at the 2017 Mining Indaba – the world’s largest mining investment conference. The company’s executives welcome you to booth 924, from the 6th through the 9th of February.

The Indaba, held at the Cape Town International Convention Center in South Africa, has attracted participation from heads of states, high-ranking government officials, global mining companies, technology and service providers and other significant stakeholders. 

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Overcoming Power Transmission and Distribution Limitation: A Case for Distributed Power Generation

Sub-Saharan African economies have been exhibiting notable growth in the past years, on the back of a formidable performance from their industrial, manufacturing, services and technology sectors. This feat is nothing short of impressive, as sub-Saharan African economies are achieving these successes with much of its resources still left to be utilized, mainly owing to the deficiency in electricity in many of its areas.

At present, there are still approximately 600 million people in Africa that do not have access to electricity. From a global standpoint, almost 48% of the world’s population without access to electricity are in sub-Saharan Africa. In fact, only seven countries – Cameroon, Ivory Coast, Gabon, Ghana, Namibia, Senegal and South Africa – have electrification rates exceeding 50%. The rest of the region’s rate hover in the area of 20%.

In this light, increasing the region’s access to reliable electricity should be a priority and an urgent necessity to ensure that Africa maximizes its economic potential.

Hurdling challenges in delivering power

One of the salient power-related challenges that sub-Saharan African countries are facing is distributing power across its territories. Building the necessary infrastructure to efficiently deliver power across vast and remote areas is not only cost prohibitive, but may also take years to complete. Delays in the completion of essential power infrastructure, due to issues in funding, regulatory approval, construction or commissioning, result not only in tangible financial losses, but also in lost economic opportunities, owing to deferment of or interruption in commercial and/or industrial activities.

Such an adverse repercussion can potentially be avoided by turning to distributed power. There are instances when power generation capacity is sufficient, but distribution systems are constrained and unable to deliver the electric power to households, businesses and industrial areas. Distributed power systems, like temporary power plants, are the ideal solution to electricity distribution limitation.

Temporary power plants represent a readily available, flexible, scalable, reliable and cost-efficient solution to overcome power distribution limitation.

They can be transported from and to anywhere in the world, and can be installed and powered on in a matter of days, reducing turnaround time and immediately supplying power to residents, businesses and industries. They are able to fully function in virtually any site, including those where power infrastructure, like grids or substations, is outdated, constrained, damaged or absent.

They are flexible in power and voltage, and are scalable to match their power output to the precise power requirement of any site. For instance, power utilities can choose to put additional power modules to the existing temporary power plant in case the power demand increases at any point in time. This can be done without causing any interruption to the supply of electricity. Similarly, when power demand goes down, the temporary power plan can be scaled down.

Temporary power solutions also address challenges in terms of financing and operational affordability. Power utilities can turn to temporary power solutions without spending scarce resources on capital purchase. They can pay for the temporary power from their operating revenues, and can save on operating and maintenance expenses, owing to the fuel efficiency and reliability of temporary power plants.

When the need to boost power distribution has been fulfilled, power utilities can choose to simply end the contract, and the installed temporary power plants will be demobilized. There will be no permanent infrastructure or purchased equipment left idle or that should be regularly maintained, because the entire power solution package was simply hired.

While electricity generation has increased in most countries across sub-Saharan Africa, there still exist power distribution challenges that hamper the delivery of quality electricity to the general population. In many sub-Saharan African countries, efficient electricity distribution is generally limited to large cities and industrial areas, with the overall electrification rates remaining repressed. Distributed power technologies, like temporary power plants, can help bring power to the larger public. By resolving power distribution limitation, more people and businesses in sub-Saharan Africa will enjoy a reliable supply of electricity, which can potentially pave the way for the region’s sustainable economic development.

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