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, according to World Bank’s report.
The
report, entitled ‘Power of the Mine: A Transformative Opportunity for
Sub-Saharan Africa’ was released at the Mining Indaba underway in Cape
Town, South Africa.
The
bank called on the mining industry to work more closely with
electricity utilities 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.
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 s 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 nonmining 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 selfsupplying and selling to the grid or serving
as anchor consumers for IPPs. The report estimates around $6 billion in
potential publicprivate 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.
Lack
of energy stunts the economic growth that s needed to reduce poverty
and boost prosperity for all Africans. Integrating mining demand into
national and regional power systems especially in mineral rich and
energy-poor countries can bring enormous benefits to countries and
communities.
By
choosing grid-based and cleaner power sourcing options, which are
typically priced lower than self-supplied electricity from diesel or
heavy fuel oil, mining companies will be able to meet their electricity
needs while also helping to light up the community, said Anita George,
Senior Director of the World Bank’s Energy and Extractives Global
Practice.
In
turn, countries will benefit from improved competitiveness of the
mining companies, greater tax revenues from mines and more job
opportunities for local people.
The
report states that though there are risks associated with power-mining
integration for example from falling commodity prices or a shortage of
transmission links regulatory and financial solutions can help mitigate
these risks. A key element is for countries across Sub-Saharan Africa to
continue with their power sector reforms and create an attractive
operating environment for IPPs, including renewable energy developers.
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