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Exxaro Reits Lephalale Solar Project in Limpopo, the first operating solar plant in the mining industry to power an operating coal mine
The Lephalale Solar Project, a subsidiary of Cinnergi, Exxaro’s renewable business, this week marked the transition from a development project to an operational asset.
Designed to generate about 176 GWh of renewable energy a year, it supplies renewable power directly to Exxaro’s flagship Grootegeluk Mine which supplies the Medupi and Matimba power stations.
The plant is a boost for Exxaro’s carbon reduction ambitions, as it will cut the group’s carbon footprint by 17% and for the Grootegeluk mine by 25%. It will trim Exxaro’s power costs by R100m a year.
Spread across 185 hectares, the plant comprises 129,024 solar modules and delivers 68 Megawatts of alternating current (MWac) at the point of connection.
Exxaro supplies 30% of <a href="https://absafricatv.com/south-africa-names-ruto-in-fight-against-xenophobia-claims/" title="South Africa Names Ruto in Fight Against Xenophobia Claims”>South Africa’s coal through its coal supply to Eskom’s power plants.
Speaking at the plant this week, CEO Ben Magara said it was the first solar plant in the mining industry to power an operating coal mine. “This is Exxaro’s contribution not only to South Africa and to our just energy transition in reducing emissions, reducing our costs, but particularly it is about creating jobs and economic growth,” he said.
More than 800 jobs were created during the construction of the plant, and more jobs are set to be created as Cinnergi plans to construct a battery energy facility of 100MW at the Lephalale Solar Plant. The company is also looking into a second phase in the solar plant as it plans to feed green electrons to its power plants.
Cinnergi, the renewable business, has a 20-year power purchase agreement with Northam Platinum to supply 140MW of clean electricity from the Karreebosch Wind Farm to support Northam’s operations.
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Megara said the strategy was to have all Exxaro coal mines powered by green energy by 2030.
Through Cinnergi, Exxaro produces under 500MW of renewable energy from wind and solar, which is expected to double by the end of next year, and beyond 2030 it will be 1,600MW.
The construction of the solar plant comes as Limpopo positions itself at the centre of the just energy transition and decarbonisation agenda environment and tourism, Tshitereke Baldwin Matibe, who was at the plant
“We are diversifying from solely being known for our rich mineral refor renewable energy investment,” he said
With roots in Iscor, Exxaro Resets and established Exxaro Re
Iscor was South Africa’s iron and steel giant, which unbundled in two separate iron ore and steel companies in 2001 — Kumba Iron Ore and ArcelorMittal South Africa, which are listed on the JSE.
We are diversifying from solely being known for our rich mineral refor renewable energy investment
— Tshitereke Baldwin Matibe, economic development, environment & tourism MEC
Exxaro, with a R75bn market capitalisation, has paid R85bn in 46 consecutive dividend payouts and special dividends since it listed in 2006. Magara said since listing two decades ago Exxaro has been cash generating, profitable and a dividend payer due to its “defensive portfolio” because of the annuity linked to its Eskom portfolio.
While the group can do more to drive its export business, it has consistently generated profits and paid dividends to investors.
“The impact it has made on original founders and investors is amazing. So you will find the broad-based nature of the Eyesizwe structure, which is our BEE structure, and the rural women who had nothing, and how their kids are now medical doctors and engineers, how their own houses have moved from just normal mud into a well-built five-bedroomed house with borehole water and solar … So the impact has gone beyond mining,” he said.
Exxaro is a diversified mining company focused on energy, coal and manganese. It became the fourth largest manganese producer in the world after it acquired assets from Ntsimbintle Holdings and OM Holdings in a R10.6bn acquisition two years ago.
A few years ago some lenders would not fund new coal mining projects; however, the trajectory has changed.
There has been a more pragmatic approach to appreciating that the global energy mix and the just transition in South Africa still require coal for a long time, said Magara.
“It is important to have baseload, and that baseload comes from reliableve been delayed, which means coal is going to be here for longer,” Megara said
He indicated that pragmatism towards coal has been evidenced by the increasing of bank facilities from R10bn to R13bn involving credit facilities at ever more attractive interest rates.
