Gold Fields planning solar future - BDlive
GOLD Fields would decide by the end of the year on a solar project to give it half the power it needed at its South Deep mine, reducing exposure to Eskom’s ageing plants, said CEO Nick Holland.
Gold Fields, which has only the South Deep mine in SA, needs 80MW at the plant, and the company has issued a request for proposals.
"We’ve have been running through the process of getting those in and working through them. I would like a clear strategic direction by the end of the year and (to ) make a decision by then," Mr Holland said.
"One of the reasons we’ve not had load shedding is because economic growth is fairly low, and that will change sooner or later.
"We need to keep an eye on the future supply risk, particularly given the fact a sizeable proportion of Eskom’s capacity is beyond mid-life. That worries us," he said. "We’d be helping the country to reduce our load on the system."
Mining companies are also working to reduce their carbon footprint.
South Deep, which neighbours Sibanye Gold’s Kloof mine, could draw power from a scheme Sibanye CEO Neal Froneman has articulated to mine coal, feed an independent power producer, and have a steady, relatively cheap source of electricity.
"We have chatted informally and briefly, and I think Neal’s strategy still has some time to unfold, but we keep the door open to all possibilities," Mr Holland said, adding that if it came to fruition, Sibanye’s scheme could top up the solar power option and take South Deep off the grid.
Gold Fields would not look at hydrogen-powered fuel cells as a source of electricity and would not emulate Impala Platinum, which is installing 22MW of fuel cell power to take its entire Springs refinery off the grid.
"It’s got to be proven," Mr Holland said. "The broad-scale commercialisation of fuel cells hasn’t really taken off. We want to use proven technology, and solar is proven technology."
Gold Fields, which could not sustain $100m annual losses at South Deep, had taken a two-year gap to rethink the mine, and would update the market in February next year on production targets and timelines, Mr Holland said, adding the mine remained a core asset and would not be unbundled or sold.
In the 2015 annual report, South Deep was described as the company’s "top risk." Asked how this risk would be mitigated, he said: "If we stop losing money, we’d have derisked the mine."
The mine was on track to reach breakeven by the end of the year, and with the rand gold price close to R600,000/kg, that target could be reached sooner, Mr Holland said.
The recent tax and royalty change agreements reached with the Ghanaian government will be an important factor in deciding the future of the Damang mine, where Gold Fields has to decide whether to enlarge the pit to reach fresh ore or suspend the operation.
"It’s a big help getting the tax and the royalties down and it will certainly help the investment case for Damang. We are running through the numbers and we’ll be finished by the middle of the year, when we’ll give our view for the way forward," Mr Holland said.
"This sets up a platform for Gold Fields to create something long term and sustainable in Ghana. This gives a whole new paradigm view for Ghana."
Gold Fields would like to acquire Anglo Gold Ashanti’s Iduapriem gold mine, next to its Tarkwa mine in Ghana, but this would have to be AngloGold’s decision, he said.
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