Gold Fields Ghana Limited (lead gold miner) is to switch the source of energy supply for its mining operations in the Western Region from the national grid to privately generated electricity by the end of the third quarter.
The switch over is the outcome of a special arrangement between the company and independent power producer (IPP), Genser Energy Ghana Limited, that will spare some 18 megawatts (MW) of power for the national grid while insulating the company's operations from the erratic power supply.
The company's Vice President and Head of Stakeholder Relations, Mr David Johnson, told the Graphic Business in Tarkwa that the arrangement will result in the generation of 20MW of electricity each in the Tarkwa and Damang mines within the first two years.
Afterwards, the amount of power generated could be raised depending on the growth profiles of the two mines, Mr Johnson said.
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The two mines currently consume a total of 55MW, with the Tarkwa operations, one of the biggest surface mines in West Africa, consuming 38MW. The Damang Mine, however, consumes 17MW.
The production of 20MW each in the two mines, therefore, means that Gold Fields can spare a total of 15MW of electricity for the national grid, which can then be redistributed among new and existing customers of the national power supplier, the Electricity Company of Ghana (ECG).
The excess electricity to be generated from Damang, which is about three megawatts, will also be fed into the national grid, Mr Johnson said.
Beyond shelving the company's operations from the erratic power supply, Mr Johnson said it would also save cost as the alternative power to the grid was comparatively less costly.
With gold prices facing steep declines and cost of production on the increase, Gold Fields has been on the lookout for cost-cutting measures that will help improve its bottom line.
Its target is to bring cost of production per an ounce of gold to US$1,000 from the current US$1,300.
The switch to private power, therefore, comes in handy
Mr Johnson also stated that the Volta River Authority (VRA) had already approved plans for a switch over, making it possible for the two mines to get off the national grid should test runs on the plants conclude successfully.