Modern Mining August 2015

COMMENT

Zambian power problems highlight a continent-wide electricity deficit

T he power shortages now hitting the Zambian Copperbelt which are threatening – in particular – the ramp-up of First Quantum’s new growth projects are a reminder (if one were needed) that electricity supply short- falls are not just a South African phenomenon but a continent-wide problem. In country af- ter country across Africa demand consistently exceeds what national electricity generating utilities can supply, with the result that com- mercial consumers of electricity all over the continent, especially mining companies, have to rely on expensive genset power to make up the deficit. This is not a new phenomenon – I can remember making trips to Ghana, for exam- ple, in the early 2000s, when mines all over the country were battling power constraints – but until recently Zambia seemed to be an exception to the rule. It was long ago recog- nised that the very ‘wet’ underground mines of the Copperbelt – Konkola reputedly has an inflow of 400 000 m 3 per day of water – could not afford to have their electricity-intensive pumping operations interrupted for any length of time. In fact, the present Copperbelt Energy Corporation (CEC) was established in the 1950s – it was known during this period as the Rhodesia-Congo Border Power Corporation – specifically to ensure a reliable and stable supply of power to the Copperbelt mines. The CEC – which in the 1980s became the power arm of ZCCM and in 1997 adopted its present name when ZCCM’s assets were pri- vatised – is primarily a transmission company (although it does have 80 MW of generat- ing capacity to handle mining emergencies). It buys its electricity from ZESCO, Zambia’s state-owned power utility, so it can’t really be blamed for the present problems. ZESCO itself, which relies on hydropower schemes such as Kariba and Kafue Gorge for most of its generating capacity, attributes its current inability to meet demand to drought conditions. Whether this is correct I’ve no idea but I’ve seen at least one recent article in the Zambian press – by an ex-senior executive of ZESCO – suggesting that the utility has exag- gerated the scale of the drought and that water levels in the Kafue River in particular are entirely normal. Whatever the case, drought is not an uncommon occurrence in Africa and one would think that ZESCO – and other utilities in Africa who habitually use ‘drought’ conditions as an excuse for erratic supply – would plan accordingly.

There are some projects currently in the pro- cess of coming on stream in Zambia, including the Itezhi-tezhi hydro scheme on the Kafue and a thermal plant in the Maamba coalfield, but whether these are going to be sufficient to plug a countrywide deficit currently estimated at up to 600 MW remains to be seen. To give some perspective on this, the mills alone at First Quantum’s new Sentinel mine will consume 100 MW when the mine is in full production – which is not far short of Itezhi-tezhi’s entire capacity of 120 MW. Moving on from Zambia to the continent as a whole, one wonders where the electricity to accommodate Africa’s high projected growth is going to come from over the next few years. The World Bank Group – in a report entitled The Power of the Mine: A Transformative Opportunity , published earlier this year – has predicted that demand for power from the mining sector alone in sub-Saharan Africa will potentially reach 23 000 MW plus as early as 2020, roughly a tripling of the 8 000 MW required in 2000. This figure of 23 000 MW may not mean much to some readers but it is substantial if one considers that sub-Saharan Africa’s total installed generating capacity is currently (according to the World Bank report) around 78 000 MW. On a more optimistic note, I should mention that a just released report from PwC – Africa power and utilities survey – summarises the views of 51 senior power and utility sector executives from 15 African countries, with 96 % of them saying that there is a medium or high probability that load shedding will be the exception rather than the norm by 2025. A similar percentage says there is a medium or high probability that, by the same year, the challenge of finding a market design that can balance investment, affordability and access issues will have largely been solved. I certainly hope the executives surveyed are right in their predictions. The growth potential – especially in mining – that could be unlocked if the continent’s power restraints were removed is truly huge. It’s probably worth pointing out though that utilities around Africa – not least our own Eskom – have consistently got things wrong over a period of many years and that the optimistic views expressed in the PwC survey (while encouraging) should be treated with a degree of caution. These are, after all, the views of executives who are – presumably – at least partly responsible for getting us into the pres- ent mess in the first place. Arthur Tassell

The World Bank Group has predicted that demand for power from the mining sector alone in sub- Saharan Africa will potentially reach 23 000 MW plus as early as 2020, roughly a tripling of the 8 000 MW required in 2000.

August 2015  MODERN MINING  3