Mining companies that carry out operations in Sub-Saharan Africa have been advised to invest in renewable energy. In the report published by Fitch Solutions, this move is the way to go considering the prevalence of off-grid remote mineral deposits in Sub-Saharan Africa in addition to the unreliable nature of traditional grid-power.
Furthermore, according to the market research firm, off-grid mines could benefit by taking advantage of the favourable climate conditions in the area and reducing their dependency on diesel.
The report explains that the remote location of many important mineral deposits together with the underdeveloped state of power and transport infrastructure means that there are a large number of mines not connected to national or regional electrical grids. As such, many of the mining operations in Sub-Saharan Africa are forced to depend solely on diesel-generated power, which is expensive to transport and subject to significant volatility in terms of pricing.
According to the report, miners’ dependency on the fossil fuel would be significantly reduced if they adopted renewable power. Decentralized power, the report asserts, will go a long way towards ensuring that the mining companies reduce their exposure to expensive fuels, but also make use of them as back-up power when solar or wind power is unavailable.
Fitch’s experts also suggest that grid-connected mines would also benefit from incorporating renewables to their power mix. This is because they are able to play a role as potential remedies to the challenges associated with the unreliability of conventional grid power across the region, where power outages and exorbitant electricity prices are common.
Some of the major risks as highlighted in the report include poor corporate governance and financial management. These two should lead companies to avoid depending on their grids.