Mining groups are increasingly moving into the power sector, with some forced to build their own electricity plants for mining operations while others have created power units that behave like utilities.
Rio Tinto’s Alcan aluminium division owns or is a
partner in 12 power stations generating more
than 5 040 megawatts each year, meeting about
half of the unit’s electricity needs. Alcan has
signed an agreement with Cameroon to consider
building a 1 000MW hydroelectric plant to
supply power to a new smelter.
Xstrata is major producer of ferrochrome, but its expansion plans in South Africa have run up against a power shortage. The firm is working on a project to use its own waste coal in a power plant. Once the project is approved, the plant could produce 750MW within four years at a cost of about $750 million. Xstrata has plans to install a coal-fired power station for its Kniambo nickel plant in New Caledonia and is working on a power project for its copper division in Chile.
Anglo American is looking into making use of
low-quality coal that cannot be sold and ends up
in waste heaps. A feasibility study has been
completed and a tender has been issued to find
a partner to build and manage the power plant.
Before the merger that created the biggest mining group, BHP Billiton owned a power generating business, which it sold in 1999 to Duke Energy International. Its expansion of the Worsley alumina refinery in Australia included a cogeneration power plant owned by Griffin Energy, with capacity to export excess power. The group has signed an agreement with the Democratic Republic of Congo to investigate a $3bn aluminium smelter. BHP Billiton has agreed to fund a feasibility study for the Inga 3 hydropower station.
South African junior mining firm Jubilee Platinum
recently agreed to buy a majority stake in power
generation company Power Alt. The deal would
provide power for its new smelter plus allow the
development of a stand-alone, gas-fired power
generation business, the company said.
Local ferrochrome producer International Ferro Metals said this month it had commissioned a co-generation plant, that uses waste gas from its smelter to produce electricity. The plant will produce 11 percent of the company’s total requirement at a cost much lower than Eskom, lowering power costs by 10 percent. The plant should qualify for carbon credits, providing potential annual income of e1.4m (R13.3m).
Source: Reuters