Local mining companies are increasingly implementing measures that ensure more energy efficient and cost-effective operations at their mines and processing plants, National Business Initiative (NBI) energy head Valerie Geen tells Mining Weekly.

She points out that mining companies, which tend to be energy intensive, are very conscious of rising energy costs being one of their highest cost factors.

Geen notes that the NBI’s Energy Efficiency Leadership Network (EELN) offers an overarching strategic framework for engagement between business and government on energy efficiency matters.

“There are currently 58 EELN members and these companies’ reason for joining is to be the first movers in energy efficiency in South Africa,” she states.

The UK government, through its Department of International Development, awarded £8.6-million in funding to the NBI in June 2013 to implement a countrywide support programme for the private sector in South Africa to improve energy efficiency.

“A significant amount of the money has to date been spent on assisting larger companies in reducing energy consumption and carbon emissions through the NBI’s Private Sector Energy Efficiency programme (PSEE),” says Geen.

The NBI defines large companies as those with an energy expenditure of more than R45-million a year, she adds.

PSEE KwaZulu-Natal account manager Gason Moonsamy points out that mines consume about 15% of South Africa’s electricity and about 10% of the country’s diesel supply.

“Many mines operate 24/7, 365 days a year, and require a stable supply of baseload electricity. Therefore, renewable-energy sources are currently unsuitable for baseload power generation, as they depend entirely on sunshine or wind, which are not always available.”

Nonetheless, he notes that several mines are using photovoltaic solar panels to power their administration offices to offset at least some electricity requirements.

“I believe that mines have done a lot in the area of energy efficiency and have . . . in some cases, even pioneered new technologies,” says Moonsamy, adding that it is hoped that solar and wind technology at mining operations can be scaled up to substantially offset the use of fossil fuel-based energy sources.

However, he says the biggest challenge that companies in the mining sector face in terms of implementing new, energy efficient technologies is that they do not have the funds to upgrade or introduce new technologies, owing to declining commodity prices and other related cost pressures.

“The mining majors are the ones that are making the greatest progress in introducing renewable-energy power sources to their operations. However . . . the long-term economic viability . . . of such technologies remains a concern,” says Moonsamy.

Geen adds that specific focus areas for energy efficiency in mines include mine lighting and ventilation, which are closely aligned to safety, health and production.

Mining companies, regardless of their being members of the EELN or the PSEE, are applying for the 12L tax incentive to offset energy efficiency implementation costs. The incentive enables companies to claim for tax deductions after implementing energy efficiency measures. These savings must be verified by SANAS-accredited professionals and the kilowatt hours (kWh) [or kWh equivalent] savings are reimbursable for one calendar year of energy-performance assessments.

In his State of the Nation address, President Jacob Zuma announced the increase of the value of the incentive to R0.95/kWh, or kWh equivalent, of energy efficiency savings, which was up from the previous incentive of R0.45/kWh.

“While its primary objective is to foster continuous energy efficiency improvement until 2020, the incentive is also the proverbial carrot being dangled amid the impending carbon tax,” states Geen.

Exxaro, Sibanye Gold, Sasol Mining, BHP Billiton, Richards Bay Coal Terminal, and Mogale Alloys comprise the mining company contingent of the PSEE’s 30 members.

“These companies have embraced the PSEE initiative and are actively encouraging other companies to undertake energy-saving measures.”

Geen notes that mining giant Anglo American is also playing an active role in continuous energy efficiency improvements through the EELN, which is chaired by Anglo American energy and carbon emissions lead Stan Pillay, who also represents business on the PSEE project steering committee.