Gold mining companies operating in Tanzania are expected to
nearly treble their power consumption in the next couple of years
as more mines get connected to the national power grid, Tanzania's
Chamber of Minerals and Energy said Wednesday.
According to Ami Mpungwe, the TCME president, power consumption
in the mining sector is expected to increase to 146 megawatts from
the current 50 MW, when all the mines are connected to the national
grid.
"There is a need to improve infrastructure to sustain growth in
this (mining) sector," he said by telephone from Tanzania.
"Currently, most mine houses are generating their own power at a
substantial cost, which erodes competitiveness."
According to Mpungwe, because of the substantial costs involved
in running operations in the energy crisis-stricken nation,
Tanzania is unable to benefit from the current boom in
international gold prices.
The state power utility, Tanzania Electricity Supply Corp., is
the process of extending transmission lines to mines in remote
areas around Lake Victoria in an effort to connect them to the
national grid.
Some gold mines, including Geita Gold Mine, the country's
largest gold miner by output, aren't connected to the national grid
and rely on fuel-fired thermal power plants to run operations.
Geita is owned by South Africa-based Anglo Gold Ashanti Ltd.
(AU).
Mines connected to the national grid include the Bulyanhulu,
Buzwagi and North Mara mines--operated respectively by African
Barrick Gold (ABG.LN), Resolute Mining Ltd.'s (RSG.AU) Golden Pride
Mine, Tanzanite One Ltd.--and the Williamson Diamond Mine.
Mines connected to the national grid also have backup thermal
generation plants, due to the poor power supply in the East African
nation, which is facing a deficit of at least 300 MW due to
inadequate generation at its main power plants.
The Tanzanian government said in August that it is planning to
increase power tariffs for the electricity supplied to gold mining
companies in a bid to fund its ailing electricity sector.
According to the energy and minerals minister, William Ngeleja,
the government is also planning to spend $775 million on emergency
power projects aimed at doubling generating to 882 MW by December
2012.
Gold is Tanzania's main foreign revenue earner.
-By Nicholas Bariyo, Dow Jones Newswires; 256-75-2624615
bariyonic@yahoo.co.uk