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    The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa
    The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa
    The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa
    Ebook258 pages2 hours

    The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa

    By Sudeshna Ghosh Banerjee, Zayra Romo, Gary McMahon and

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    Africa needs power - to grow its economies and enhance the welfare of its people. Power for all is still a long distance away - two thirds of the population remains without electricity and enterprises rank electricity as a top constraint to doing business. This sub-optimal situation coexists while vast energy resources remain untapped. One solution to harness these resources could be to tap into the concept of anchor load. Mining industry lends itself to the concept of anchor load as it needs power in large quantity and reliable quality to run its processes. Underpinned by a comprehensive database of mining projects between 2000 and 2020, this report explores the potential and challenges of using mining demand for power as anchor load for national power system development and expansion of electrification. This report finds that mining demand can indeed be a game-changer - an opportunity where policymakers and international community can make a difference in tapping the enormous mineral wealth of Africa for the benefit of so many people. The utilities would benefit from having mining companies as creditworthy consumers that facilitate generation and transmission investments producing economies of scale needed for large infrastructure projects, benefiting all consumers in the system. The mines would benefit from grid supply - typically priced much lower than self-supply - which allows them to focus on their core business, greatly enhancing their competitiveness. The country would benefit from more exports and tax revenues from mines, more job opportunities in local firms selling goods and services to the mines, and a higher GDP.The report estimates that mining demand for power can triple since 2000 going upto 23 GW in 2030. While South Africa will continue to be the dominant presence in mining landscape, its importance will reduce and other countries, primarily in Southern African region, will emerge as important contributers of mining demand for power. Simulations in countries with minimal power-mining interface suggests that bringing this demand explicitly into the power planning process can ensure more investments in both grid and off-grid power systems and potentially superior service delivery outcomes for mines as well as communities. These opportunities can also be attractive investment destinations for private sector. However, there are also risks and institutional roadblocks in power-mining integration - addressing many of them and employing risk mitigation mechanism are within the control of policymakers.
    LanguageEnglish
    PublisherWorld Bank Publications
    Release dateDec 9, 2014
    ISBN9781464802935
    The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa

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      Book preview

      The Power of the Mine - Sudeshna Ghosh Banerjee

      DIRECTIONS IN DEVELOPMENT

      Energy and Mining

      The Power of the Mine

      A Transformative Opportunity for Sub-Saharan Africa

      Sudeshna Ghosh Banerjee, Zayra Romo, Gary McMahon, Perrine Toledano, Peter Robinson, and Inés Pérez Arroyo

      © 2015 International Bank for Reconstruction and Development / The World Bank

      1818 H Street NW, Washington DC 20433

      Telephone: 202-473-1000; Internet: www.worldbank.org

      Some rights reserved

      1 2 3 4 17 16 15 14

      This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

      Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

      Rights and Permissions

      This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions:

      Attribution—Please cite the work as follows: Banerjee, Sudeshna Ghosh, Zayra Romo, Gary McMahon, Perrine Toledano, Peter Robinson, and Inés Pérez Arroyo. 2015. The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa. Directions in Development. Washington, DC: World Bank. doi:10.1596/978-1-4648-0292-8. License: Creative Commons Attribution CC BY 3.0 IGO.

      Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation.

      Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Responsibility for the views and opinions expressed in the adaptation rests solely with the author or authors of the adaptation and are not endorsed by The World Bank.

      Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images.

      All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected].

      ISBN (paper): 978-1-4648-0292-8

      ISBN (electronic): 978-1-4648-0293-5

      DOI: 10.1596/978-1-4648-0292-8

      Cover photo: Left: © Jamie Seno / Lighting Africa. Used with the permission of Lighting Africa. Further permission required for reuse. Right: © Oleg Fedorenko/iStock/Thinkstock. Further permission required for reuse.

      Cover design: Debra Naylor, Naylor Design, Inc.

      Library of Congress Cataloging-in-Publication Data has been requested.

      Contents

      Boxes

      Figures

      Maps

      Tables

      Foreword

      A Potential Game Changer for Sub-Saharan Africa

      Africa is blessed with energy resources yet they go largely untapped. As a result, only one in three Africans has access to energy, which stymies economic growth on the continent and seriously limits human potential and well-being. If nothing changes, Sub-Saharan Africa as a region will actually see the number of people without electricity increase from 590 million in 2013 to 655 million by 2030.

      Against this backdrop, The Power of the Mine: A Transformative Opportunity for Sub-Saharan Africa (http://www.worldbank.org/africa/powerofthemine) tackles a fairly new area of inquiry on the energy front: how can an energy-intensive, high-volume customer like the mining industry improve its contribution to energy supply, help expand access, and attract private capital into the space?

      The report shows that the mining industry in Sub-Saharan Africa has been sourcing power in innovative ways—some involving national utilities and some not. The self-supply arrangement imposes a loss for everyone—people, utilities, mines, and national economies. Since 2000, mines in Africa have spent around $15.3 billion to cover their own electricity investment and operating costs and have installed 1,590 megawatts of generating capacity. None of this power made it onto a national grid.

      Irrespective of the country—ranging from areas where a grid barely exists, forcing mines to secure their own generation, to those

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