June 4, 2019 / 4:53 PM / a month ago

S.Africa's mines, energy minister says all options open for future power supply

* Coal and IPP can coexist, says minister

* Mantashe not ruling out nuclear power

By Tanisha Heiberg

JOHANNESBURG, June 4 (Reuters) - South Africa’s mines and energy minister said the country is mulling all options from coal to renewables to nuclear power as part of its future energy mix, as Africa’s most industrialised economy battles a power crisis.

Gwede Mantashe, appointed as head of the newly combined energy and mineral resources portfolio last week, has taken over the implementation of the Integrated Resource Plan (IRP), a long-term framework for South Africa’s energy mix, from former energy minister Jeff Radebe.

An early version of the plan released last year focused on building up supply from natural gas, wind and other energy sources, while cancelling plans to add nuclear capacity.

Mantashe previously served as minister of mining and advocated for the future of the coal industry, raising questions over whether his appointment would mean coal taking a greater role in South African power generation.

Speaking at a junior miners’ conference during his first public engagement since his new appointment, Mantashe backed a wide spread of power sources as part of the energy mix.

“To me it is not about killing coal and growing renewables,” he said. “It is about promoting the various technologies that are at our disposal. It is a combination and coexistence of the various technologies.”

The minister, who has urged mining firms to exploit clean coal technology, said he was meeting with his department on Tuesday to discuss the country’s energy supply, which posed “the biggest threat to the economy”.

“We will look into whether there are gaps or weaknesses. We are going there not with the intention of changing everything my predecessor did, but we will look into everything that they have done,” Mantashe said.

Mantashe did not rule out nuclear energy as part of South Africa’s energy mix.

“You cannot exclude any technology when you have that decision, including nuclear,” he said. “We cannot write off anything.”

Some analysts are however concerned that any changes to the energy plan could further slow reforms and disrupt the renewable energy sector.

“There may be a difference in focus which the new minister brings which may mean he would want to review the current very much renewable-focused draft IRP,” said South African energy expert Chris Yelland.

South Africa, which produces the majority of its power from coal, has begun signing contracts for wind and solar deals with independent power producers, stoking concerns over the future of coal mining.

The minister, a former trade unionist, will need to take into account potential job losses in the coal industry, which is the third largest employer in the mining sector, which has already suffered job cuts, if it is phased out.

Unemployment is a politically sensitive issue in South Africa where unemployment runs at around 27%.

“Gwede has some tough choices going forward,” Peter Major, an analyst and director of mining at Mergence Corporate Solutions, said. (Additional reporting Alex Winning; Editing by Jan Harvey)

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