Quantification of optimal electricity cost risk reduction for a South African gold mining company

Abstract

Electricity cost risks such as carbon tax, ECS and unavoidable tariff increases threaten the financial wellbeing of South African gold mines. Some of these proposed cost risks are however not enforced as yet. However, once approved, they could result in thousands of jobs being lost. The Eskom Integrated Demand Management (IDM) funding program for industrial projects has also been put on hold. With more than 97 large (367 MW total) projects already implemented on South African gold mines, these savings or projects were regarded as easier and with the largest savings. Therefore, new projects could be difficult to motivate due to longer payback periods of IDM funding being stopped. The aim of this study is therefore to investigate the total electricity cost risk reduction potential of one of the largest gold mining companies in South Africa. The electricity reduction potential will then be quantified in relation to the largest electricity consuming services and optimal production ratio. Benchmarking was used to provide the optimal point of production related to energy intensity. These results also provide electricity reduction targets for other South African gold mines.