As part of its effort to ensure the sustainability of its KwaZulu-Natal operations, mineral sands producer Richards Bay Minerals (RBM) is actively derisking its cost base and improving its security of supply and carbon footprint through its growing renewable-energy portfolio, with the Bolobedu solar farm, located in Limpopo, already supplying electricity alongside two wind farms currently under construction, says RBM growth strategy GM Bradley Reddy.

Following the approval of a power purchase agreement (PPA) in 2022, international renewable energy company Voltalia and its local partners constructed the plant, which has a total installed capacity of 148 MW and is expected to reduce RBM’s yearly greenhouse gas emissions by about 10%, or about 237 000 t/y of CO₂ equivalent.

Commissioned in Apil this year, the Bolobedu solar farm is now fully operational and delivers renewable energy to RBM’s KwaZulu-Natal operations through State-owned power utility Eskom’s transmission infrastructure as part of an electricity wheeling framework.

“Bolobedu is a large solar PV plant in South Africa dedicated to a single off-taker – RBM, and forms part of the company’s broader renewable-energy portfolio, which includes two larger wind power PPAs,” says Reddy.

Together, these projects are targeted to reduce RBM’s operations’ direct and indirect emissions by about 60% compared to a 2018 baseline.

Eskom’s wheeling framework allows a business to buy electricity from an independent power producer (IPP), such as a solar or wind farm, even if the generator is located far away, explains Reddy.

“Eskom uses its transmission and distribution network to ‘wheel’ that electricity from the generator to the customer,” he says.

Through wheeling, Eskom measures the energy put into the grid and the energy consumed by the customer, then reconciles the transaction financially, based on the approved schedule of standard prices.

Reddy notes that while using a third party transmission network entails some risk, including additional use-of-system costs and the risk of curtailment, because of RBM’s operational location relative to the location of South Africa’s best renewable- energy resources, wheeling remains a more attractive option in comparison to a direct “private-wire” PPA.

Wind Power
Both wind projects employed by RBM are currently in construction. The Khangela Emoyeni wind farm, bordering the Western Cape and Northern Cape, is on track to achieve commercial operation in the fourth quarter of this year.

The 140 MW project is expected to deliver about 460 GWh of renewable energy a year to RBM through a wheeling arrangement with Eskom.

Meanwhile, IPP Red Rocket’s FE Overberg wind farm project, of which RBM has been allocated 230 MW of the project’s total 380 MW export capacity, is being developed and commissioned in two phases and is expected to achieve commercial operation by the late second quarter of 2027.

On completion, RBM will receive a combined 500 MW across all three renewable- energy projects.

As electricity supplied by Eskom is significantly more expensive than RBM’s contracted renewable-energy PPAs, the PPA projects are expected to directly improve cost-competitiveness, once fully operational.

Additionally, the renewable-energy PPAs mark a critical step in RBM’s commitment to sustainable mining as it moves forward with the $473-million Zulti South project, which was approved in March this year, with the aim of extending the mine’s life to 2050 and ensuring operational continuity.

Reddy assures that RBM’s Zulti South project and energy requirements were considered closely when RBM developed its power strategy, adding that the wheeling framework will enable RBM to allocate a portion of the existing portfolio of renewable energy to the Zulti South operations.

Despite its renewable-energy progress, he says RBM remains exposed to higher Eskom tariffs in the interim, underscoring the need for tariff relief to protect jobs.

“Without the option for reduced power costs, we would already be preparing to close our smelters. [This year] could mark three successive years of losses at our smelting and processing facility,” says Reddy, adding that as a baseload power generation-dependent customer, the company requires Eskom’s support to ensure a fair and sustainable tariff is agreed by both parties.

RBM is engaging with Eskom and the Department of Trade, Industry and Competition to explore ways of reducing power costs, which may include negotiating reasonable and fair tariffs, which, in turn, will reduce the current losses at RBM’s smelting and processing operations, concludes Reddy.