Photograph — iroy.in

On the sidelines of the just concluded 2020 Investing in African Mining Indaba conference in Cape Town, South Africa has indicated plans to create a new power generating company separate from its national utility company, Eskom, to boost power supply. This was announced by Gwede Mantashe, the country’s Mineral Resources and Energy Minister on Thursday, 6th of February, 2020.

According to Mantashe, the new entity would be created to ensure the “security of energy supply” in the country and not necessarily eliminating Eskom. Although he did not clearly express what the partnership would entail or what the energy plans are, he called on the industry to partner with the government to achieve this goal.

Thabo Mokoena, Director-general in the Department of Mineral Resources, also emphasised that the main aim of the new company would be to improve energy security.

Energy crisis in South Africa actively began in 2007 with different levels of power cuts, after its coal-fired national grids experienced recurrent breakdowns in its generating capacity, which made Eskom struggle to deliver electricity. The mining sector and other key sectors of the country largely depend on Eskom for energy supply to run heavy-duty machines for quality outputs. But the energy dilemma has forced many companies out of the country, leading to massive unemployment.

In December 2019, Impala Platinum (Implats), a company which had a total attributable resources of 133.8 million ounces of platinum, announced the shutting down of its Rustenberg and Marula mines due to extreme power cuts. The implication of that move was that 40,000 people became unemployed. Impala is one of the biggest mining companies operating in South Africa and a leading supplier of platinum group metals (PGMs).

South Africa is the largest producer of platinum and palladium. The country supplies 85 percent of the world’s platinum and 30 percent of palladium. Global Platinum group metal (PGM) reserves were estimated to 2.4 million oz. in the country, which accounts for a global share of 90.9 percent, followed by Russia and Zimbabwe. 

The energy crisis in South Africa has not only affected its GDP but it has also had a significant impact on the global cost of platinum. Stakeholders in the mining sector should consider partnering with the government for a sustainable energy solution to improve the country, their trade, and to meet global demands of minerals from the sector.

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