African-focused mid-tier gold producer, Pan African Resources PLC, has announced that it has entered into a power purchase agreement (PPA) with Sturdee Energy, for wheeled supply of renewable energy from its 40MW Bela solar PV facility in Limpopo, to any of the Group’s operations in South Africa.
Sturdee’s Bela solar PV facility is expected to provide approximately 112,399 MWh of renewable energy per annum to Pan African for an initial PPA term of 10 years, with the option to extend it for another 5 years.
According to Pan African, the indicative tariffs over the extended 15-year period will be significantly lower than that expected from Eskom, and the gold producer estimates that about ZAR646 million in NPV10 savings will be achieved over a 10-year period, and ZAR884 million over a 15-year period.
“There may also be further tariff savings if this 40MW Bela project is scaled up to its permitted 75MW of solar power. The resultant economies of scale associated with the construction of such a larger project should result in an even lower tariff for Pan African,” the company said in a statement.
The Bela solar PV facility has already obtained the key permits required for construction. This includes environmental approvals, water use licence, and rezoning approvals. The facility will be connected to the Eskom grid via a 132 kV line in the area of Bela Bela.
Pan African on a renewable energy drive
Pan African also revealed that the solar energy project will be funded by third party financial institutions with no upfront contribution from the mining company.
“The PPA is subject to standard terms and conditions typical for agreements of this nature and will become effective following the construction of the Bela solar PV facility, estimated to take place during the 2025 calendar year,” Pan African said.
Besides the solar PPA with Sturdee Energy, Pan African is embarking on a renewable energy strategy that includes construction of an 8.75 MW solar PV facility at its Fairview Mines, development and construction of a second solar PV facility with a minimum output of 12 MW at Evander Mines, and construction of a solar PV facility at its Mogale operations.
The gold producer last year commissioned a 10MW solar plant for its Evander Mines, the first utility-scale, grid-tied solar PV plant to be commissioned by a mining company in South Africa.
“Our solar PV renewable energy initiatives are key components in progressing Pan African’s renewable energy strategy and in achieving our sustainability targets,” said Cobus Loots, Chief Executive Officer of Pan African Resources.
“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 per ounce of production in the longer term,” he concluded.