PAN African Resources announced today it had signed a power purchase agreement for third party supply of renewable energy from a proposed 40MW plant at Bela Bela in South Africa’s Limpopo province.
Solar energy totalling 112,399 MW will be supplied from the plant over an initial ten-year period at a tariff below Eskom’s, the country’s government owned utility, Pan African said. If the agreement is extended to its full 15-year period, Pan African stands to achieve R884m in net present value savings, it estimated.
The PPA is one of several initiatives planned by Pan African, a gold producer with annual output of about 200,000 ounces. It said in an update today it had started a feasibility study into renewable facilities for its proposed Mogale project west of Johannesburg.
It also announced a feasibility study was underway for the expansion of its 10MW Evander Gold Mines solar project as well as a 8.74MW solar project at Fairview mines. If the various solar projects are implemented, Pan African will lock in 28% of its energy requirements from renewable energy saving it R154m in costs annually.
The projects will also result in 137,000 tons in carbon dioxide emissions a year.
“In addition to measurably reducing the group’s carbon emissions, these projects will assist in stabilising the electricity supply to our operations, while also realising commensurate cost savings that will assist in reducing our overall AISC (all in sustaining cost) per ounce of production in the longer term,” said Cobus Loots, CEO of Pan African in a statement.
The PPA will become effective following construction of the Bela Bela project which is scheduled for 2025. It will be funded by third party financial institutions with no upfront capital required from Pan African, the company said.
Sturdee Energy, which operates 600MW in renewable projects in South Africa, has had the the Bela Bela project fully permitted. It will be connected to the national grid via a 132kV line in the Bela Bela district.
As for the Fairview solar installation, which is also permitted, an estimated R26m in annual savings will be achieved in the first year and R40m over the life of the facility. Payback will be achieved in eight years assuming an annual Eskom tariff lift of 10%.
An agreement for engineering, procurement and construction at Fairview has been signed with JUWI Renewable Energies for the Fairview project. JUWI was the EPC contractor on the 10MW Evander solar facility which Pan African said today could be supplemented by another solar plant with minimum energy output of 12MW.
Pan African is at the forefront of companies equipping South Africa’s mining sector with reneweable and a degree of independence of Eskom’s failing generation capacity. According to the Minerals Council the mining sector has some 9GW worth of projects worth R160bn on the go, excluding 50MW installed by Gold Fields at its South Deep mine last year.