Business News of Tuesday, 10 February 2015
Source: World Bank Group
Mining companies can play a key role in harnessing Africa’s abundant clean sources of energy to overcome the lack of electricity which affects at least one in three Africans, a new World Bank report has stated.
In its report, entitled Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa, the Bank calls on the mining industry to work more closely with electricity companies in the region to meet their growing energy demands.
“Rather than supplying their own energy on site, mines can become major and reliable customers for electricity utilities or independent power producers (IPPs) which can then grow and develop better infrastructure to bring low-cost power to communities. Power is critical to mining companies operations and, by becoming anchor customers for electricity utilities, mines can save hundreds of millions of dollars in supplying their own power,” the reported stated.
Sub-Saharan Africa, as a region, only generates 80 gigawatts of power each year for 48 countries and a population of 1.1 billion people.
Two-thirds of people in the region live entirely without electricity and those with a power connection, suffer constant disruptions in supply.
Without new investment and with current rates of population growth, there will be more Africans without power by 2030 than there are now.
The report finds that mining demand for power in Sub-Saharan Africa will likely triple between 2000 and 2020 to reach over 23,000 MW. This could be higher than non-mining demand for power in some countries, “yet, many mining companies are still opting to supply their own electricity with diesel generators rather than buy power from the grid often because of shortcomings in national power systems in the region.”
According to the report, another 10 gigawatts of electricity will be added to meet mining power demand by 2020 from 2012 levels and a part of this is projected to come from self-supply arrangements costing mining companies up to $3.3 billion.
But new models of power supply for mines are emerging across Sub-Saharan Africa including mines self-supplying and selling to the grid or serving as anchor consumers for IPPs.
The report estimates around $6 billion in potential public-private partnership opportunities for new power generation from clean energy sources (including natural gas and hydropower) in Guinea, Mauritania, Tanzania and Mozambique countries with strong expected growth in power demand from the mining sector.