Pan African Resources beefs up renewable energy capacity at its mines

Pan African Resources is beefing up renewable energy capacity at its mines to improve supply and reduce production costs and its carbon footprint. 

The mid-tier gold producer announced on Monday it was constructing a 10.5MW solar plant at its Barberton Mines’ Fairview operation that would result in electricity costs savings of about R40m a year for the next 20 years. 

The estimated cost of the Fairvest solar plant is R215m-R220m. 

“Costs will be quantified further closer to the time as there are quite a few variables to consider, including material costs and the highly volatile exchange rates,” said Hethen Hira, head of investor relations at Pan African. 

“We have raised enough debt facilities for our in-house projects as announced with the recent sustainability bond.” 

Pan African has also entered into a power purchase agreement with Sturdee Energy for a wheeled renewable energy solution of 40MW from its Bela-Bela Project solar PV facility in Limpopo to any of the group’s operations. 

The initial power purchase agreement term is 10 years, with the option to extend it for another five years. 

The Bela solar PV facility is expected to provide about 112,399MW/h of renewable energy per year to Pan African, resulting in an estimated R646m in savings over 10 years and R884m over a 15-year horizon. 

There may also be further tariff savings if this 40MW Bela project is scaled up to its permitted 75MW of solar power, according to Pan African. 

The Bela project, which will be constructed in 2025, will be funded by third party financial institutions with no upfront contribution from Pan African. 

The gold producer was also conducting a feasibility study to expand Evander Mines’ 10MW solar PV renewable energy facility by an additional 12MW. 

Another feasibility study is under way to build a solar PV renewable energy facility for the Mogale tailings retreatment plant. 

“Our solar PV renewable energy initiatives are key components in progressing Pan African’s renewable energy strategy and in achieving our sustainability targets,” CEO Cobus Loots said. 

“In addition to measurably reducing the group’s carbon emissions, these projects will assist in stabilising the electricity supply to our operations, while also realising commensurate cost savings that will assist in reducing our overall AISC [all-in-sustaining costs] per ounce of production in the longer term.” 

Pan African’s initiatives come at the time when SA is alternating between stages 4 and 6, resulting in lost production for miners. 

The company’s share price was little changed at R4.48 in early afternoon trade on the JSE, but up 34% so far in 2023.

mahlangua@businesslive.co.za