Sibanye Gold is looking at ditching South Africa’s biggest electricity provider in favour of the sun.
In response to rising electricity costs, the company says it’s considering building a 10-megawatt solar power plant, CEO Neal Froneman told Bloomberg.
Since 2007, the firm’s power costs have risen 60%, even as operations began using less power. Eskom Holdings, South Africa’s state-run electricity provider, hiked prices by 8% this year alone.
“If electricity is going to become such a big part of our cost base, we have to look at putting in energy sources ourselves,” Froneman told Bloomberg. “We’ve got the space and South Africa has plenty of sunshine. It’s very viable and we’re doing a lot of work on it.”
In its 2012 financial report, Sibanye cited the rising cost of power as a major contributor to its operating cost increase of 10%.
In March, the National Energy Regulator allowed Eskom to raise tariffs by 8% for each of the next five years. The utility company wanted a 16% hike.
Sibanye would not be the first mining company to consider the transition to renewable energy. Last year, the world’s biggest iron ore producer Vale SA announced that it would invest $315 million in two wind farms.