AMN - Importance of energy security – comment by Yolanda Torrisi

The importance of reliable energy supplies was brought home last week as South Africa faced blackouts that affected the mining industry. Just a few weeks on from energy security discussions at the African Mining Indaba conference, the power-outs highlighted the potential effect unreliable energy supplies could have on the bottom line of companies across the continent.

South Africa’s president Cyril Ramaphosa had told the conference a restoration of energy security was imperative and attention was being paid to the energy crisis and the nation’s electricity company Eskom.

The African nation is heavily reliant on Eskom, with 90% of power sourced from the utility. The mining industry grabs a 15% share of Eskom’s output, making it also vulnerable to an overloaded system.

Prompted by last week’s power cuts, Minerals Council spokeswoman Charmane Russell warned rolling blackouts from Eskom would affect the commercial viability of mines. She also flagged deep-level and platinum mines were particularly vulnerable.

Among the miners declaring effects from the latest blackouts were producer Anglo American Platinum (Amplats), which lost 14,000 ounces, along with diversified miners Exxaro and Anglo American.

But what can we do about Eskom? And where are we going?

As we chatted about at Indaba, supporting Eskom is one way forward. Another is to improve access to ports, rail and other vital transportation infrastructure. A third option is to install alternative energy supplies, taking a leaf out of Gold Fields’ book at Granny Smith gold mine in Australia.

Miners who lived through South Africa’s electricity crisis of 2008 understand all too easily reasons to avoid a critical overload of electricity grids. No power means reduced suppliers for waiting markets.

Some miners are responding to the continent’s energy challenge by reducing their risks and creating their own energy sources. Others are putting loads on power grids at off-peak times to smooth out their impacts. Each company’s efforts add up as the industry takes a proactive approach to the challenge.

For more thoughts on Eskom and the way forward for energy supply, come along to hear Energy Expert Coalition senior energy and mining & commodities specialist Ted Blom speak at African Mining Network’s ESKOM — Quo vadis? event at 6-9pm on Thursday, March 28 at The Wanderers Club in Johannesburg, South Africa.

-  Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com