Platinum group metal (PGM) producer Northam has finalised a power purchase agreement (PPA) with an independent power producer (IPP) to supply wheeled electricity from the 140 MW Karreebosch Wind Farm, on the border of the Northern Cape and the Western Cape, to provide energy to its PGM operations in Limpopo and the North West.

This is the second significant renewable-energy deal for Northam, following the finalisation of a PPA in respect of an 80 MW solar power plant to service its Zondereinde mine, as announced in October 2024.

Karreebosch, owned 80% by Cennergi, a subsidiary of Exxaro Resources, and 20% by G7 Renewable Energies, is located between the towns of Sutherland in the Northern Cape and Matjiesfontein in the Western Cape.

The wind farm will supply about 460 GWh/y of clean electricity to Northam’s operations under a 20-year PPA, with the energy to be wheeled using power utility Eskom’s transmission grid.

“Reaching financial close with our partners G7 and Northam reaffirms Exxaro’s commitment to decarbonisation and diversification as set out in its Sustainable, Growth, and Impact strategy and underscores our commitment to delivering reliable and sustainable energy solutions.

“This project not only strengthens South Africa’s industrial energy security but also accelerates the country’s transition to renewable energy,”  says Cennergi MD Leon Groenewald.

Construction will start this month and will be completed in 24 months.

The wind farm represents a total investment of R4.7-billion which will be project financed by Nedbank, Absa and Standard Bank, with the financial structure set up to ensure long-term sustainability.

Beyond generating clean energy, Karreebosch Wind Farm will create about 1 030 construction jobs and 17 permanent operational roles, driving local employment and skills development.

Furthermore, sustainable impact community initiatives will be undertaken in Sutherland, Laingsburg and Matjiesfontein, focusing on education, early childhood development, skills training and healthcare, and fostering socioeconomic growth and wellbeing, highlighting Cennergi’s commitment to sustainability, innovation and community empowerment, all of which are key anchors to supporting South Africa’s transition to a low-carbon economy.

Karreebosch will add 112 MW net capacity to Cennergi’s existing 297 MW portfolio, bringing total managed capacity to 409 MW.

This supports Cennergi’s ambition to be a leading energy solutions business, with a targeted managed capacity of 1.6 GW by 2030.

Northam, meanwhile, says the combination of the solar and wind power procured by it will reduce the group's carbon footprint by up to 45%, while providing substantial energy cost savings and improving security of power supply.

Northam says the project is part of a broader strategy of reducing its environmental impact while improving business resilience through securing the supply and reducing the cost of bulk services.

Northam is progressing other renewable-energy projects in a dynamic and rapidly changing technological and legislative environment. These include additional solar and battery storage initiatives.

"Northam continues to demonstrate its commitment to sustainably reducing the environmental impact of our mines while realising significant and sustainable cost savings.

“This latest agreement, relating to our second major renewable-energy plant, represents a further milestone in this ambition. The environmental, operating cost and energy security benefits implicit in these initiatives further ensure the success of our world-class operations well into the future,” says Northam CEO Paul Dunne.