JOHANNESBURG, Aug 26 – South Africa’s mining industry is accelerating its shift towards renewable energy as companies seek to reduce electricity costs, diversify their power supplies and meet decarbonisation targets after decades of dependence on state utility Eskom.
According to a Reuters report, companies including Anglo American, Sibanye Stillwater and Exxaro Resources are developing or procuring renewable power as Eskom’s ageing coal-fired fleet continues to dominate the country’s electricity system. Coal currently accounts for more than 80% of South Africa’s power generation, while renewable sources contribute about 10%.
The transition is being driven by both economic and environmental considerations, mining companies face growing pressure to reduce emissions while also securing reliable power for energy-intensive operations. Executives say renewable electricity can provide substantial savings compared with expected Eskom tariffs, strengthening the financial case for investment.
Anglo American has pursued renewable generation through a partnership with EDF power solutions, a subsidiary of France’s EDF. The companies established Envusa Energy in 2022 through a 50-50 joint venture to supply renewable electricity to Anglo’s operations, including Kumba Iron Ore, De Beers and Valterra Platinum.
Envusa currently has 520 megawatts of renewable generation capacity, comprising 280 MW of wind and 240 MW of solar. That capacity supplies about 30% of the energy consumed by Anglo’s mines. The company has a development pipeline of 1,500 MW and aims to reach 3,000 MW of generation capacity by 2030 for Anglo’s operations and other industrial customers.
Envusa Chief Executive Nicole Mason said renewable power could offer a significant cost advantage. “You’re looking at somewhere between 20% and 30% cheaper on the renewable side if you’re just looking at wind and solar,” she said.
Mason added that the company is prioritising additional wind developments alongside solar projects combined with battery storage. “The next projects that we are focusing on are a couple of really strong wind projects as well as a number of behind-the-meter solar plus battery projects.”
Sibanye Stillwater is pursuing a different model, relying primarily on power purchase agreements rather than directly owning renewable generation assets. The company sourced about 99% of the electricity required by its South African platinum-group metals operations and 88% of its gold operations from Eskom last year.
Sibanye has contracted 835 MW of renewable energy capacity, of which 164 MW is already operational. By the end of 2028, renewables are expected to supply about 64% of total energy demand across its South African operations.
Chief Executive Richard Stewart said the strategy is driven by both decarbonisation and financial considerations. “Our secured renewable energy portfolio is not only about reducing carbon emissions and enhancing energy security; it is also a business imperative that is expected to deliver meaningful cost benefits,” he said.
Stewart expects renewable electricity to cost between 20% and 30% less than projected Eskom tariffs. However, he said the national utility would remain important because renewable generation cannot consistently provide electricity around the clock. “Renewables are intermittent by nature, battery storage technology is still developing, and Eskom supplies essential baseload power,” he said.
Coal producers are also investing in renewable generation as they seek to manage energy costs and prepare for a lower-carbon economy. Exxaro Resources, through its renewable energy subsidiary Cennergi, currently operates 297 MW of capacity and has a near-term pipeline of another 593 MW.
Exxaro is targeting 1,600 MW of net installed renewable capacity by 2030 as part of plans to reduce Scope 1 and Scope 2 emissions by 40% by 2030 and 70% by 2040, with carbon neutrality targeted for 2050.
The company’s 68 MW solar facility has already reduced its Grootegeluk coal mine’s reliance on the national grid by 30%. Exxaro said the project saves about 100 million rand, equivalent to roughly $6.25 million, annually in electricity costs while cutting the mine’s Scope 2 emissions by 22%.
Cennergi also supplies electricity to Eskom and other industrial customers, creating an additional revenue stream from the group’s investment in renewable generation.
Exxaro Chief Executive Ben Magara said the company ultimately wants its mines to rely more heavily on renewable sources, while recognising the limitations of intermittent generation. “Our intention as part of decarbonization is that our mines could actually all go on to solar and wind energy, but obviously you still need a baseload of coal when you don’t have wind or solar,” he said.
Thungela Resources is pursuing another route to reduce its dependence on conventional electricity supplies. The coal producer is developing a coal-bed methane project at Lephalale in Limpopo province, with the longer-term possibility of developing a commercial liquefied natural gas business.
The project involves extracting methane from coal seams in the Waterberg coalfield. About 19 wells have been drilled, and the company has begun producing gas that will be used to generate electricity at one of its sites.
Thungela Chief Financial Officer Deon Smith said the project could deliver meaningful savings once the wells are fully operational. “For the 19 holes we are able to save 30, 40 odd million rand on the Eskom utility bill per annum if those holes are fully functional,” Smith said, adding that the savings could represent about 6% to 7% of the company’s total annual utility costs.
The growing investment by mining companies points to a broader restructuring of South Africa’s electricity market. Rather than relying exclusively on Eskom, large industrial users are increasingly combining power purchase agreements, private generation, battery storage and alternative fuels to secure electricity and manage costs.
