As the mining industry in South Africa faces challenges from increasing electricity costs and supply limitations, an increasing number of mining firms are significantly investing in renewable energy to ensure operational stability and reduce long-term expenses.

According to the Minerals Council South Africa’s Facts and Figures 2024, nearly 70% of South Africa’s large-scale renewable energy projects currently in the pipeline are linked to the mining sector. This amounts to roughly 90 projects, representing a potential 15,800 megawatts (MW) of generation capacity and R275 billion in investment over the next several years.

A Shift from Eskom dependency

Electricity is one of the mining industry’s biggest expenses, especially for deep-level operations in gold and PGMs. Many mines rely on Eskom power for pumping, cooling, and ventilation systems, whether they are actively mining or not. This fixed energy demand, coupled with tariff hikes, has severely strained profitability.

While Eskom’s 2025 tariff increase of 12.74% was lower than the initially proposed 36%, the total increase over the next three years still amounts to nearly 25%. This continues to squeeze already thin margins, particularly in energy-intensive commodities like gold.

As a result, renewable energy is no longer a nice-to-have—it’s becoming essential. Mines are rolling out solar PV, wind power, battery energy storage, and gas-to-power systems to reduce exposure to Eskom’s grid and ensure energy security.

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Key drivers of investment

1. Cost relief: With renewables offering lower long-term operating costs, they are now viewed as a hedge against future electricity price hikes.
2. Supply stability: Rolling blackouts have significantly impacted production in previous years. Even as loadshedding eased in 2024, the risk remains.
3. Environmental pressure: Global investors and stakeholders are increasingly demanding lower-carbon operations. Decarbonising energy use helps mines align with ESG targets.
4. Policy support: Structural reforms and the unbundling of Eskom have created space for private sector generation, while initiatives like Operation Vulindlela are fast-tracking approvals.

Renewable projects gaining momentum

Mining majors are already rolling out projects:

• Anglo American has committed to carbon neutrality across its operations, backed by large-scale renewables.
• Gold Fields and Harmony Gold have invested in on-site solar facilities to power processing plants and reduce reliance on the grid.
• Exxaro is transitioning from a coal-dominated portfolio to renewables, launching new clean energy subsidiaries.

In support of these moves, the Just Energy Transition Investment Plan (JET-IP), backed by over R100 billion in international funding, is enabling Eskom to repurpose old coal plants into renewable hubs. Mining-linked towns stand to benefit from job creation and infrastructure upgrades under these initiatives.

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Sustaining operations, not expansion

While mining sector capital expenditure has remained positive, it is largely geared toward sustaining current operations rather than expanding capacity. Renewable energy investments are part of this sustainability push, aiming to “future-proof” mines against rising costs and uncertain power supply. Exploration spending has decreased for the sixth consecutive year, indicating that although the sector is becoming more modern, growth is sluggish.

As mining companies align with national energy transition goals, their investments in renewables are creating a pathway forward that balances profitability, sustainability, and resilience. However, broader infrastructure issues, such as poor rail and port performance and regulatory delays, still need to be resolved to unlock the sector’s full potential.

If effectively executed, the mining industry’s green energy shift could serve as a model for other heavy industries in South Africa and a powerful case study in how necessity drives innovation.