Volta power cuts to hit gold mines

Low water levels in the Volta River system have led the Ghanaian power generation agency, the Volta River Authority, to begin a program of load management that includes some power cuts to users, including the country’s large gold mines.

Both AngloGold Ashanti (AU-N, AGD-L) and Golden Star Resources (GSC-T, GSS-X) were warned by the Authority to expect power shortages. Large users are being encouraged to cut their own power consumption by a quarter to a half.

Golden Star said its Bogoso-Prestea and Wassa gold mines could make up a power shortfall of that amount by generating power on site using existing diesel generators, at a cost of US$700,000 to US$1.4 million per month. AngloGold, which operates three mines, Obuasi, Iduapriem and Bibiani, said that the impact on those operations was “not clear at this time.”

Both companies are awaiting the results of a meeting with the Authority under the auspices of the Ghanaian Chamber of Mines.

Gold Fields (GFI-N, GOF-L, GOGOF-J) also has gold mines in Ghana that could be affected by power cuts.

Water levels at the Authority’s giant power dam at Akosombo on the Volta River have been at record low levels. The dam, which produces about 70% of Ghana’s domestic electrical power, was designed for water levels of 73 to 85 metres, but the current level is 72.2 metres.

Low rainfall last year, and increased use upstream in Burkina Faso, have both been blamed for the low water levels. A rainy season that normally arrives in September is expected to bring some relief.

A thermal power plant in western Ghana had been operating below capacity because it is being converted to burn natural gas instead of oil, further depriving the grid of power, although the Authority said that the plant was currently at full capacity. That plant is expected to fully converted late in the year. Ghana also buys power from neighbouring Cote d’Ivoire.