/ 10 May 2022

Ramaphosa: Government working to cut red tape for registration of new power projects

Mining Indaba Ramaphosa Dh 3329
President Cyril Ramaphosa at the 2022 Investing in African Mining Indaba. (David Harrison, M&G)

Even as South Africa continues to grapple with rolling blackouts largely caused by frequent breakdowns in Eskom’s generation units, President Cyril Ramaphosa said on Tuesday there had been progress in electricity generation by the mining and other sectors.

He addressed the 2022 Investing in African Mining Indaba in Cape Town hours after Eskom had to apply stage two load-shedding from 5pm to 10pm on Monday because the electricity system was severely constrained. 

Ramaphosa said that since the last mining indaba in 2019, there had been significant headway made in policy reforms for the network industries inextricably tied to mining and its operations, with the government last year amending regulations to let companies invest in new generation capacity of up to 100 megawatts without needing to apply for a licence.

“We are working to further cut red tape for the registration of projects, to accelerate environmental approvals and to strengthen the capacity of Eskom and municipalities to link such projects to the grid,” the president said.

He noted that, according to the Minerals Council South Africa, about 4 000MW, or R65- billion, of such electricity generation capacity investment is in the pipeline. 

Ramaphosa said Operation Vulindlela — a joint initiative of the presidency and the treasury to accelerate the implementation of structural reforms and support economic recovery — was working with the department of water and sanitation to implement a turnaround plan for the issuing of water use licences, critical to mining operations. 

“We are working towards a target of 80% of all applications being resolved within 90 days,” he told mining industry delegates.

According to the National Energy Regulator of South Africa, the current processing time for a licence application is 120 days once all relevant information has been provided and no objections received. 

Ramaphosa said there were plans under the resuscitated Renewable Energy Independent Power Producers Procurement Programme to substantially increase investment in wind and solar power.

The tender process for Bid Window 6 of the programme was launched in April after the preferred bidders from round five were announced. The deadline for the latest bids is 11 August.

Ramaphosa said the unbundling of Eskom into separate entities for transmission, distribution and generation was on track and set to be completed later in 2022. 

Reiterating comments from Mineral Resources and Energy Minister Gwede Mantashe at the conference on Monday, Ramaphosa said mining had an important role to play in South Africa’s just energy transition through the expected sustained demand for platinum group metals. 

Anathi Madubela is an Adamela Trust business reporter at the M&G.