Minister Mantashe wants declining energy availability factor to stop

The Department of Mineral Resources and Energy says it is working hard to resolve load shedding.
Minister Gwede Mantashe told delegates at the ongoing Investing in African Mining Indaba that the declining energy availability factor must be stopped.

The energy availability factor has declined from a high of 75% to 49% in recent weeks.

Minister Mantashe has also welcomed the establishment of joint structures by Transnet and the Minerals Council of South Africa to stabilise operations at the ports.

This year’s Mining Indaba takes place amid intense and crippling rolling blackouts, whose impact has not spared the mining industry.

The trillion rand industry, directly and indirectly, contributes about 18 percent to the country’s Gross Domestic Product at nearly R500 billion annually.

But in 2022, the industry’s contribution to GDP dropped from 7.56% to 7.53%.

Chief Economist, of the Minerals Council of South Africa, Henk Langenhoven says, “The challenges are really on a physical level, physical production because of electricity availability because of the logistics being constrained, so real output declined slightly and as you said our contribution to GDP slightly down to R495 Billion. The achievement is that we have been able to increase exports and have employed more people.”

Mantashe has outlined government’s immediate focus on resolving rolling blackouts, which includes buying power from Mozambique and Zambia.

Mineral Resources and Energy minister, Gwede Mantashe says “Our considered view is that the immediate focus to resolving load shedding must be on the following initiatives and actions. Improving EAF through focus on resolving load shedding must be on the following initiatives and actions. Improving EAF through a focused funded and planned maintenance of existing power stations. Procurement of emergency or short-term power from existing facilities and other private power plants. Purchase of additional electricity from neighbouring countries which can be unblocked in the short to medium term and improving skills capacity at Eskom.”

According to the Minerals Council of South Africa, the constraints around transport, logistics and border posts are increasingly hampering export volumes.

It estimates that the sector missed out on R35 billion worth of exports in 2021 and will be losing R50 million in export opportunities during 2022. This has caused tension between the minerals council and Transnet.

The Africa Rail Industry Association says challenges faced by Transnet and the mining industry are deeper than reported.

Africa Rail Industry Association’s Mesela Nhlapo says, “The challenges that the mining industry is facing and the challenges that are experienced by Transnet are very deep if you speak to people on the ground. There are some serious concerns including the state of the network. Transnet is proposing fees for the mining industry. Are we certain that with the increase, the money will go to fixing the network?

Because if then that is the case, then the public must know the track quality index of all roads and all those corridors, otherwise what is the point? Our government must be transparent, Transnet must be transparent and the index with the industry and the mining sector,” Nhlapo adds.

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Meanwhile, the Mineral Resources Department says the process to procure functioning mining cadastres is on target. The department is finally looking to other jurisdictions where mining cadastres are functioning.

The cadastral system will allow applicants to see where mining and prospecting activities are taking place and who owns the mining prospecting rights.

The department says it’s also making significant progress in clearing mining permits and rights backlog.

VIDEO | Mining Indaba | Impact of Transnet’s challenges, logistical constraints on mining sector: