FILE PHOTO: South Africa's Mineral Resources and Energy Minister Gwede Mantashe looks on during a news conference in Pretoria
CAPE TOWN - The mining industry will receive a major boost after the government agreed to start an energy generating company outside of Eskom as the state owned company’s operational problems threatened the economy.

Minerals and Energy Minister Gwede Mantashe told the 2020 Investing In African Mining Indaba held in Cape today that the government aimed to address structural problems at Eskom.

Mantashe received a round of applause when he informed delegates of plans to start an electricity company and also allow mining companies to generate their own energy.

“We have agreed to allow mining companies to generate energy for self use. You will not need a license for that. You will be registered to run a head with the project,” he said.

Mantashe said the government planned to establish an electricity generating company outside of Eskom.

“We are talking to investors,” said Mantashe.

Mining companies have previously requested the government to grant permission for them to generate their own electricity after load shedding hurt impacted production in December last year.

Mantashe further said, "South African mining has great benefits for investors and South Africans across the value chain. In 2019, in response to the President’s R1 trillion Investment Drive, the Department granted 28 new mining rights in coal; iron ore; manganese. Estimates are that; a potential of 4 800 jobs will be created from these and there will be a billion Rands capital expenditure. We must work together to convert these rights into active projects that can deliver the much-needed revenue and jobs."

Speaking to journalists earlier today Roger Baxter, the chief executive of the Minerals Council SA said the mining industry was working towards generating up to 1.5 gigawatts in the next three years.

Eskom’s electricity constraints have had a negative impact mining and the economy.

In December Eskom’s stage 6 load shedding compelled mining companies to cancel shifts.

WATCH: The 2020 Mining Indaba kicked off in Cape Town: