Mines should partner with independent power producers

Electricity is by and large the single biggest challenge facing the mining sector in Africa. And there is no easy solution as power generation in Africa has become embroiled in politics. According to Richard Morgan, head of government relations for Anglo American, as mining houses are pushed for more beneficiation by governments the reality is that without power the industry cannot operate and no one will benefit. A study by the World Bank recently found that the demand for electricity from the mining sector was set to increase significantly in the coming years with estimates of 23 000 megawatts by 2020. Mining companies are predicted to spend some $3 billion in the same time to supply their own power. According to Anita Marangoly George, senior director with the World Bank, none of this electricity generation is shared with national grids. She says with domestic power infrastructure weak and in light of some 60% of the continent not having power there was much room for mining houses and national utilities to work together. “The mining industry may argue that this delivery of power is not worth the risk due to the current environment, but I would argue that the volatility of commodity prices strengthens the case for mines to partner with national utilities and independent power producers to plan for long term power needs together.” Morgan said it was important for the development of a plan where governments and mining houses could work towards the same goal. Mark Bristow, CEO of Randgold Resources, reiterated this saying the lack of an integrated plan on how to move forward and address the situation was part and parcel of the problem. “We have talked about this for a long time. We must not confuse meetings and conferences with doing things,” he said. “To make it happen we need a plan and it requires all the role-players. We have to appreciate that we require each other as partners – that we as business want to return and create value and governments want to develop countries. We are aligned and that should be the driver.” INSERT The volatility of commodity prices strengthens the case for mines to partner with national utilities. – Anita Marangoly George