The African mining industry is undergoing a transformative shift towards green energy, as nearly every mining company in South Africa, and many across the continent, are increasingly turning to renewable energy sources. This movement is not just about being environmentally responsible but also makes solid economic sense, even before the imposition of carbon taxes.
Mike Peo, head of infrastructure, energy, and telecommunications at Nedbank Corporate and Investment Banking (CIB), emphasized the scale of this transition in an interview with Mining Weekly. “We’re witnessing a massive shift,” Peo stated, highlighting that the green energy pipeline of projects is currently at an all-time high.
The push towards green energy is driven by a combination of factors. One of the most significant is the economic viability of renewable energy. Peo pointed out that the cost-effectiveness of green energy, even without carbon taxes, is compelling mining companies to adopt it. Traditional power sources, such as coal and diesel, are not only environmentally damaging but also increasingly expensive compared to solar and wind energy, especially when paired with battery storage.
Transmission infrastructure, however, remains a significant challenge. Many remote areas in Africa struggle with the logistics of transmitting power from large, central power stations. To address this, there’s a growing trend towards decentralized generation, where smaller power stations are set up closer to where the energy is needed. This approach not only ensures that power reaches isolated locations but also that this power is green.
When it comes to leading the charge for green energy in Africa, South Africa and Kenya are at the forefront. South Africa, in particular, has made significant strides due to its market liberalization, which has allowed the private sector to take an active role in green energy projects. This has led to private companies building as much, if not more, green energy capacity than the state utility, Eskom.
The continent’s commitment to green energy is also evident in its response to the global push for a just energy transition. African countries have adopted net-zero commitments, aiming to reduce their carbon footprints while recognizing that an immediate switch away from fossil fuels is neither feasible nor financially viable. Instead, the focus is on gradually transitioning from coal, oil, and gas to renewable energy sources.
Mining companies across Africa are playing a crucial role in this transition. Many of these companies, especially those owned by global mining houses, have set ambitious net-zero targets and are actively procuring green energy to meet these goals. The shift is driven by three main factors: a commitment to decarbonization, the rising cost of traditional energy sources, and the need for a secure and stable energy supply.
This shift is not just limited to South Africa. Across the continent, from the Democratic Republic of Congo to Zambia, mining companies are investing heavily in renewable energy. This trend is further supported by Africa’s abundant natural resources, such as solar and wind, which make it an ideal region for green energy development.
While Africa is rich in renewable energy resources, the transition to green energy is not without its challenges. The most significant of these is the continent’s underdeveloped transmission networks, which make it difficult to deliver power from renewable energy sources to where it’s needed most. In response, there’s a growing emphasis on decentralized energy solutions, such as mini- and microgrids, which can provide power to remote areas without relying on extensive transmission infrastructure.
Despite these challenges, there are also significant opportunities. Africa’s vast solar and wind resources, coupled with its hydropower potential, provide a strong foundation for the continent’s green energy future. Additionally, the global shift away from financing fossil fuels is making it easier to raise capital for renewable energy projects.
However, the transition to green energy also requires a focus on skills development. Peo emphasized the need for more engineers, technicians, and other skilled professionals to support the development and implementation of green energy projects. South Africa, for instance, is working to address this through initiatives like the Green Hydrogen Valley project in the Eastern Cape, which aims to develop the skills needed for a green hydrogen economy.
Looking ahead, the consequences of not transitioning to green energy could be severe for Africa. As global financial institutions increasingly refuse to finance fossil fuel projects, countries that fail to embrace renewable energy may find it difficult to raise capital for new energy projects. Additionally, the eventual introduction of carbon taxes could make traditional energy sources even less economically viable.
The growing awareness of green hydrogen, particularly in South Africa, is another promising development. Projects like the Hive green ammonia project in the Eastern Cape are positioning Africa as a leader in the global green hydrogen economy.
Africa’s shift to green energy is both a necessity and an opportunity. With the right investments, skills development, and infrastructure improvements, the continent can not only meet its energy needs but also lead the world in the transition to a sustainable, green energy future. The race is on, and Africa’s mining industry is at the forefront of this critical transition.
Source: Mining Weekly
