SA’s miners could have fixed Eskom problems 10 years ago
But talks with the government about setting up independent power producers went nowhere
There is a level of pragmatism underneath the frustration felt by mining company executives towards Eskom.
While the criticism levelled at Eskom’s board for its management of SA’s most critical business is unequivocal and the annoyance palpable, there is no stampede by mining company executives to remove themselves from the grid.
The alternatives are expensive and unreliable in the case of renewable energy options. The size and cost of solar arrays to power mines and processing plants makes this option one that would need offtake for two or three decades.
Years ago major mining companies Anglo American and Xstrata (now taken over by Glencore), which had large coal businesses, spoke to Eskom and the government about setting up independent power producers, putting electricity into the grid as well as securing reliable and cost-effective power for their energy intensive businesses – such as smelting and refining platinum group metals, or producing ferrochrome.
Those talks went nowhere and the plans were shelved with no intention of reviving them.
Since the notification from Eskom to the mining industry in February 2008 that it could not guarantee power to mines, leading to underground mines stalling production until that guarantee could be provided, mining companies have cut out as much electricity consumption as possible.
While executives talk of investigating options to set up power-generating capacity for their mines, there is the deep-seated realisation that if they take their operations off the grid the problems at Eskom will be exacerbated as key customers find alternatives, depriving Eskom of steady revenue.
Eskom needs to open its generation business to private operators, which could go a long way to fixing the problem. Eskom has clearly proved itself utterly incapable of project management and execution as evidenced by the unfolding fiasco at the new, massively over-budget and delayed Medupi and Khusile power stations.