The Ghana Chamber of Mines has indicated that the current load-shedding exercise is impacting their operations adversely and, therefore, likely to ebb the mining sector’s contribution to the national purse, that is royalty revenue, corporate tax receipts and PAYE.
This potential outturn is attributable to the hike in production cost elicited by the complementary self-generation of power as well as the decline in output of its member companies with its attendant negative effect on operations and their support to the economy
Institutions that supply electricity to companies that contribute significantly to economic growth have been urged to exempt such companies from the ongoing load-shedding exercise.
The companies have also expressed their willingness to support government to find lasting solutions to the worsening power crisis.
Dr Sam Kobina De Souza, Director of Regional Risk Management and Power at Newmont Ghana, speaking on behalf of the Chamber of Mines, said that the load shedding is impacting industries, especially mining companies, negatively, with dire consequences for the nation.
He said mining companies already pay more for electricity than any other consumer of electricity.
Mining companies are now shedding more of the power they consume as part of efforts to manage the country’s deteriorating energy crisis.
The firms now shed over 30% of electricity from the initial 25% agreed last December.
This means the mining companies virtually shut down their operations once every three days, but it is unclear how this could ease the ongoing load shedding for consumers and other businesses.
Dr De Souza explained that the load shedding, which has been extended to industries and mining companies, has dire consequences for job security as the companies have no choice but to lay off workers.
He stated that community development projects being undertaken by mining firms may also be halted impacted, which would impact affected mining communities negatively.
In reference to the issue relating to indebtedness, which has contributed to the load-shedding situation, Dr De Souza noted that mining companies pay their electricity bills on time; therefore, the industry could not be a contributor to the underlying causes for there was no reason to include them in load shedding.
He wondered why ECG would continue to supply power to institutions hugely indebted to it.
In 2007, a consortium of mining companies constructed an 80 megawatt power plant at a cost of more than US$45 million.
Known as the Mines Reserve Power Plant, it was used by mining companies only in load-shedding situations.
At the time, the country was facing a supply shortfall of more than 300MW.
The four mining firms which constructed the plant were Newmont Ghana Limited, Goldfields Ghana, AngloGold Ashanti, and Golden Star Resources.
When the load shedding subsided in 2008, the plant was made available to the VRA to supplement any energy generation shortfalls in the country.
Currently, the country faces a shortfall of between 400 and 650 megawatts.
In a related development, the Association of Ghana Industries (AGI) last week called for a short-term time-based action plan to reduce the energy deficit in order to resolve the current energy crisis.
The call follows the unprecedented negative growth in manufacturing in 2014.
Manufacturing recorded the worst growth rate in recent memory of a negative 8% in 2014 as the sector continues to shrink.
The AGI fears that Ghana risks losing its industrial base if government policies do not quickly address these challenges to revive the industrial sector.
The AGI is also calling for complete institutional reforms of the operations and management of entities responsible for the entire power sector.
Source: The Finder
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