Mining and Energy

  • Year: 2013

Project name: The impact of electricty price increases on the competitiveness of selected mining sector and smelting value chains in South Africa 

Client: Economic Development Department (EDD) and Department of Trade and Industry (the dti)

Funder: Global Green Growth Institute (GGGI)

Duration: 2013-2014

Summary

This research project was jointly commissioned by the EDD and the dti. The GGGI was tasked with implementing the project as part of a partnership to support the South African government’s green growth planning efforts. TIPS was the primary research partner and service provider. This project is the result of the collaboration of all of these institutions. The South African government’s Inter-departmental Green Growth Committee, chaired by EDD, served as the project steering committee for this research. A multi-stakeholder Technical Reference Group was also established to offer inputs on various drafts of the report.

Although not directly associated with the transition to a green growth path, recent trends in South Africa’s electricity supply industry, which has been characterised by energy supply problems since a load shedding crisis in 2008 and drastic price increases (i.e. a trebling of the average electricity price from 2009/2010 to 2017/2018), provide an opportunity to investigate the shift to a greener path. Using these developments as an entry point, this paper investigates the impact of electricity price increases on the competitiveness of mining-related companies and the mitigation measures implemented by various firms in the four most important mining value chains in South Africa, namely platinum, gold, iron ore and coal. Particular attention was paid to the role that electricity price increases and energy security concerns have played in fostering investments by mining-related firms in renewable energy and energy efficiency. It represents a condensed version of an earlier report, which was the result of extensive fieldwork and interviews with stakeholders across the selected mining value chains.

For any enquiries related to the report that are relevant to the dti and EDD, please contact Christian Prins, Economist (macro economic policy), EDD, at cprins@economic.gov.za.

The impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa

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