Pan African Resources saves up to R3m a month with solar plant
The miner plans to install a further 20MW by 2024, for a total of 30MW, which should bring the savings to around R100m a year
30 January 2023 - 15:15
by Andries Mahlangu
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Mid-tier gold producer Pan African Resources said on Monday it was saving between R2.5m and R3m a month on energy bills thanks to a 10MW solar plant at Evander Mines.
High costs and unreliable energy supply are some of the chief concerns among businesses, especially so in the mining industry where electricity is projected to rise to 12.5% of costs by 2024 from 9% now.
The higher cost of electricity means the share of energy in intermediary inputs will increase from 24% to 38% in gold mining by 2024, according to industry body Minerals Council SA.
Energy regulator Nersa recently granted power utility Eskom tariff increases of 18.65% for 2023 and 12.7% in 2024.
“We plan to install a further 20MW by 2024, for a total of 30MW, which should bring savings to around R100m a year and more when tariff increases come into effect over the years,” said Hethen Hira, head of investor relations at Pan African Resources after the company released its operational update for the six months to end-December.
Gold output for the period dropped 14.6% to 92,307oz, but it still kept the production forecast for the full-year intact at 195,000oz to 205,000oz, levels similar to those achieved in 2022.
The company said its Barberton underground operations experienced a number of headwinds in maintaining and increasing gold production, including above-inflation increases in labour and energy costs.
“The balance of our portfolio delivered in line with expectations, despite disruptions to our electricity supply and inclement weather conditions impacting operations,” CEO Cobus Loots said in a statement.
“At our Evander operation alone, electricity issues impacted production by approximately 5%, reinforcing our imperative to expand our renewable energy portfolio in the years ahead.”
Pan African Resources also has underground and tailings retreatment operations in Gauteng and Mpumalanga.
The market reacted negatively to the operational update with the share price dropping 7% to R3.65, putting on track for its biggest one-day drop since September 2021, according to Infront data.
However, the share price is up nearly 8% so far this month, giving the miner a market value of R8.1bn.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Pan African Resources saves up to R3m a month with solar plant
The miner plans to install a further 20MW by 2024, for a total of 30MW, which should bring the savings to around R100m a year
Mid-tier gold producer Pan African Resources said on Monday it was saving between R2.5m and R3m a month on energy bills thanks to a 10MW solar plant at Evander Mines.
High costs and unreliable energy supply are some of the chief concerns among businesses, especially so in the mining industry where electricity is projected to rise to 12.5% of costs by 2024 from 9% now.
The higher cost of electricity means the share of energy in intermediary inputs will increase from 24% to 38% in gold mining by 2024, according to industry body Minerals Council SA.
Energy regulator Nersa recently granted power utility Eskom tariff increases of 18.65% for 2023 and 12.7% in 2024.
“We plan to install a further 20MW by 2024, for a total of 30MW, which should bring savings to around R100m a year and more when tariff increases come into effect over the years,” said Hethen Hira, head of investor relations at Pan African Resources after the company released its operational update for the six months to end-December.
Gold output for the period dropped 14.6% to 92,307oz, but it still kept the production forecast for the full-year intact at 195,000oz to 205,000oz, levels similar to those achieved in 2022.
The company said its Barberton underground operations experienced a number of headwinds in maintaining and increasing gold production, including above-inflation increases in labour and energy costs.
“The balance of our portfolio delivered in line with expectations, despite disruptions to our electricity supply and inclement weather conditions impacting operations,” CEO Cobus Loots said in a statement.
“At our Evander operation alone, electricity issues impacted production by approximately 5%, reinforcing our imperative to expand our renewable energy portfolio in the years ahead.”
Pan African Resources also has underground and tailings retreatment operations in Gauteng and Mpumalanga.
The market reacted negatively to the operational update with the share price dropping 7% to R3.65, putting on track for its biggest one-day drop since September 2021, according to Infront data.
However, the share price is up nearly 8% so far this month, giving the miner a market value of R8.1bn.
mahlangu@businesslive.co.za
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