The Minerals Council of South Africa has welcomed Mineral Resources and Energy Minister Gwede Mantashe’s announcement that mining companies will be allowed to generate their own energy for self-use.

Mantashe made the announcement at the Mining Indaba which is currently under way in Cape Town. He also said that government was luring investors to start a company that would generate electricity outside Eskom.

The council’s chief economist Henk Langenhoven says this is expected to result in competition and ultimately bring down electricity tariffs.

“We are producing under capacity because of the problems with electricity and it will give us a little bit more certainty and we can edge a bit against tariff increases so we are delighted,” says Langenhoven.