Prioritizing a Secure Supply of Electricity
With load shedding causing significant damage to South Africa’s economy, the government has prioritized securing new power supply in the hopes of advancing grid stability and energy security.
“Six months ago, we announced a National Energy Action Plan to improve the performance of our existing power stations and to add new generation capacity to the grid as quickly as possible,” President Ramaphosa stated in Cape Town on Monday.
“Eskom has assembled experienced technical teams to improve performance and recover capacity at power stations, with an initial focus on the six least reliable stations. Through a regional power pool arrangement, we have already imported 300 MW of capacity from neighboring countries and are working to increase this by an additional 1,000 MW. In the last six months, we have signed agreements for 25 projects representing 2,800 MW of new capacity. These projects will soon be proceeding to construction. We are facilitating investment in new generation capacity by private producers by, among other things, removing the licensing threshold for embedded generation projects. Eskom is looking to purchase surplus power from companies with available generation capacity.”
For the mining industry, these measures promise new opportunities for production increases on the back of secure power supply, with progress already being made by industry players to generate their own electricity.
“According to the Minerals Council of South Africa, since the licensing threshold was lifted, approximately 89 embedded power generation projects have been developed, with a focus on renewable energy solutions like solar, wind and battery storage. Not only will these projects support mining operations themselves and bring down operating costs, but they will also add much needed power to the country’s overall supply and support South Africa’s decarbonization process.”
Accelerating Economic Reforms
In addition to power supply, President Ramaphosa emphasized the role economic reforms will play in advancing mining production and resilience, with efforts currently underway to improve the operating environment.
“We have been driving a range of structural reforms through Operation Vulindlela, an initiative of the Presidency in partnership with the National Treasury, the Department of Mineral Resources and Energy and other key departments. As part of streamlining regulatory processes, we are reducing the timeframes for environmental authorizations, exempting energy projects from environmental authorizations for certain activities, and speeding up the process of registering new projects and grid connection approvals,” the President stated, adding that, “a critical area of reform is in logistics, which is a huge problem for the mining industry.”
Tackling Illegal Mining
Another key area of concern is the rise in illegal mining and damage to infrastructure. In this regard, H.E. President Ramaphosa shared that, “The South African Police Service has established multi-disciplinary Economic Infrastructure Task Teams that are operational in 20 identified hotspots. In the last six months, these teams have conducted around hundreds of operations and made a significant number of arrests. Transnet has developed partnerships with the industry and private security to address cable theft and vandalism on the freight rail network through advanced technologies and additional security personnel.”
Improving the Regulatory Environment
Finally, the President shared that the government will “continue working with industry on reducing backlogs in prospecting and mining applications.”
With the aim of improving the business operating environment in South Africa, “The Department of Mineral Resources and Energy has indicated that the process for procuring an off-the-shelf cadastral system, which can be customized to South Africa’s needs, is underway. This is essential for the operation of a modern mining rights administration system, which in turn is vital for the growth of the industry.”
With these measures, the South African government looks forward to creating more stability across the mining market, providing industry players with the right environment for which production can increase and economic contributions advance.
