Conference, Notes and Press Conference

Harmony planning further 73 MW of green electricity generation

Harmony planning further 73 MW of green electricity generation
Mining News Pro - Like everybody else, we’re on the verge of now starting to build our renewable energy plants.

That is the latest news on the decarbonisation front from Harmony Gold CEO Peter Steenkamp, who spoke to Mining Weekly in a Zoom interview.

With hydropower already in place in Papua New Guinea, Harmony now has a comprehensive renewable rollout plan in place for South Africa.

The first phase of that involves the building of 30 MW of pay-as-you-go renewable energy plants in the Free State, to support the Johannesburg- and New York-listed gold mining company’s long-life assets such as the Tshepong and Phakisa mines and their plants.

But the interesting addition to the decarbonisation journey is the planned phase-two rollout of a further 73 MW of renewable energy.

“The 73 MW will also be solar, and then in phase three we’re talking about creating some sort of a baseload,” said Steenkamp.

Displayed during Harmony’s latest presentation of record financial results, which involved a 66% increase in profits to R12-billion for the 12 months to June 30, was a slide that showed the aspirational third phase that is still in very early stages of development increasing the green energy contribution to 121 MW of, once again, photovoltaic solar electricity rollout.

The stated objective is to diversify the energy mix, with solar the big consideration in South Africa and hydropower dominant in Papua New Guinea.

Harmony’s greenhouse gas (GHG) intensity in the 12 months to the end of June was 0.104 carbon dioxide emission (CO2e) tonnes per tonne treated, which was down on the 0.104 CO2e tonnes per tonne treated of its 2020 financial year (FY).

Its electricity intensity per tonne treated is also down from 0.12 MWh/t in FY2020 to 0.08 MWh/t in FY2021.

“We’re not sure if we’re going to do the 73 MW ourselves. Obviously, the mines which we just announced that we’re going to grow, for instance, will create the opportunity to actually build our own plants,” Steenkamp said

Harmony’s two newly announced South African growth projects are:

-the R4.5-billion Zaaiplaats gold project at the company’s Moab Khotsong gold mine in North West province; and
-the R3.2-billion extension of the large Kareerand tailings facility project at Mine Waste Solutions, near Stilfontein.

The third is a project providing another 2.5 years to the current life-of-mine (LoM) of Hidden Valley, in Papua New Guinea. Collectively, close to R8-billion will be invested in all three over an extended period using internal financial resources.

Three projects already being developed are:

- the Sub 75 Tshepong Operations project to extend the LoM to 20 years at 230 000 oz/y;
- the Target 1 decline project to extend the LoM by 16 years at 60 000 oz/y; and
- the Level 207/212 Doornkop project to enhance production to 55 000 oz/y.

On the lower cost of renewables, Steenkamp said the power purchasers agreements already in place for the 30 MW priced the renewable energy at a price considerably below that of Eskom.

“And it’s long term. Going forward, we could actually build these plant ourselves and that’s for the benefit of Harmony after the capital costs,” he said.

Harmony currently consumes about 470 MW of electricity.

“We’re also excited about Eskom’s renewables plans because that’s obviously the place where we should start with renewables,” he said.

On decarbonisation in general, Steenkamp said: “The biggest issue for us is our electricity. We’re also looking for battery-powered vehicles. We’re taking a wait-and-see attitude as far as electric vehicles are concerned.

“Certainly for Kalgold, going forward we’re looking for ways and means of doing that and again the biggest opportunities are with the new long-term projects that give you the opportunity to provide sustainable green energy,” he said.

On the potential use of green hydrogen, Steenkamp said that was certainly something that could assist the company with baseload power.

“We’re watching that and following what’s happening on the green hydrogen front,” he added.

Since 2016, Harmony has managed to reduce its electricity consumption by 33%, while realising cumulative savings of R1-billion in five years on the back of these energy saving initiatives.

“This is testimony to the fact that Harmony turns risk into opportunities,” Steenkamp said during the results presentation covered by Mining Weekly.

Thirty per cent of the key performance indicators (KPIs) of management are linked to environmental, social and governance, or ESG, outcomes, such as being included in the FTSE Good Index.

“We’re continually assessing how best to integrate energy factors into our KPIs and will be informed by those factors material to Harmony, but also the various frameworks which guide our sustainable development strategy,” Steenkamp said.

“Just as we place emphasis on diversity amongst our workforce, it’s essential to consider how we diversify our energy mix,” he added.

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