Mining companies advised to consider off-grid power sources

By Wahard Betha

Energy expert and Civil Society Organizations (CSOs) working in the extractives sector have advised mining companies to consider utilization of off grid power sources to avoid interruptions on production as the country is still struggling with power shortages.

The remarks come as the Malawi Government is negotiating Mine Development Agreements with three companies intending to launch large scale mining operations namely: ASX-listed Lotus Resources for Kayelekera Uranium Mine in Karonga district; Canada and UK listed Mkango Resources to mine rare earths at Songwe Hill in Phalombe district and ASX-listed Globe Metals & Mining to open a niobium and tantalum mine at Kanyika in Mzimba district.  

Currently, the country’s generation capacity stands at 355MW including a cross border import of 6.5MW against 2022 projected demand of 618MW.

Mining and energy expert Grain Malunga said despite that the Electricity Generation Company and Independent Power Producers (IPPs) have a number of energy generation projects in pipeline, the mining companies should consider setting up their own power plants in case the Government fails to meet the projected demand by the time the companies venture into actual mining.,

Malunga said: “Though it might be cost effective but with the electricity challenges we are experiencing, the mining companies need to have a back-up for them to excel in the industry.”

“Some of the companies will require over 10MW which might not be possible for the Government to supply if the energy situation remains unchanged.”

While concurring with Malunga, Natural Resources Justice Network (NRJN) Programs Coordinator Joy Chabwera bemoaned that currently the Government is not providing a conducive environment for mining investors in as far as energy is concerned.

Chabwera said: “When the company is coming to Malawi it considers three things; one the value of the mineral, two an enabling environment and three revenue management.

“And when we look at these aspects it is where government has to come in to provide an enabling environment for the investors including provision of needed energy.”

“If we are going to have about five large scale mines, the dream of raising Gross Domestic Product (GDP) to 20% will be realized. It is the duty of the government to provide necessary energy to the investors.”

He said though there are alternative sources of energy like coming up with their own power plants, that will come with higher costs to weigh on the feasibility of the project.

ASX-listed Paladin Resources operated the Kayelekera Mine using power it generated using diesel generators before it put the project on Care and Maintenance.

Meanwhile, Lotus indicates in a statement that apart from relying on connection to the national grid, the Company has looked into a number of options for power supply including: generating power from excess heat generated in the onsite acid plant (estimated at 2MW); renewable options, including solar and hydro; and replacement of the existing diesel gensets with a Build-Own-Operate (BOO) contract arrangement

It explains that discussions are ongoing with the Electricity Supply Corporation of Malawi (ESCOM) and a local electric power consultant has been contracted to undertake an assessment of availability and capital and operating costs for connecting to the grid either at the nearby town of Karonga (~50km from Kayelekera) or other potential substations in close proximity to Kayelekera.

It also says a consultant Metso Outotec is preparing the study for recovering energy through a steam turbine from the acid plant and solar providers have been requested to send proposals for various solar options.

The Company has conducted a detailed power assessment as part of the Definite Feasibility Study (DFS) that has considered both the cost implications and the carbon emissions for the Project.