Senegal Energy: Energy

Senegal Energy Profile 2012

With the security of energy supply a policy priority, the Senegalese government has taken action to address the situation, launching a plan to overhaul the national energy company, Société Nationale d’Électricité du Sénégal (Senelec), and improve the reliability of generation, transmission and distribution.

Introduced by the minister of energy, international cooperation, infrastructure and air transport, Karim Wade, in January 2011, Plan Takkal also provides for the creation of a National Energy Council, under the direct supervision of President Abdoulaye Wade, which will monitor and evaluate the programme’s progress.

The recovery measures come at a crucial time, with power supply proving to be susceptible to stubbornly persistent shortages. Power cuts continued into February, as Senelec warned customers of planned outages in rotation. A report carried out by consulting group McKinsey and presented by Karim Wade in February 2011 recommended that Senelec be restructured to better manage the nation’s energy demands.

The emergency measures are centred around five main axes, the first of which would focus on re-establishing consumer confidence in Senelec, through the introduction of pre-paid meters that ensure bills match actual consumption levels. The company has grappled with concerns over credibility of late, as energy bills have not gone down despite frequent power cuts prompting some customers to switch to private generators.

The second axis of the programme aims to better manage internal demand by putting in place more energy-efficient technologies. Legislation will go into effect on March 1, 2011, that prohibits the importation and usage of incandescent light bulbs nationwide, with these designed to be replaced by energy-efficient bulbs, a step that is expected to conserve 60 MW of electricity. Thirdly, the government also intends to increase short-term electricity production capacity by renting two power plants, one with a 50-MW capacity through April 2011, and a second with 100-MW capacity through August 2011.

The fourth major initiative of the programme focuses on the financial restructuring of Senelec. The company’s external liabilities were reported in February to have reached an estimated CFA286bn (€436m), and it faces serious difficulties in meeting its debts. A Ministry of Energy press release states that the primary objectives are to recapitalise the company, increase its reserve funds and lead an internal reorganisation.

Institutions are being also put in place to ensure the necessary resources are made available for the programme to be effective. First, the government has given the green light to establish a fund dedicated to purchasing fuel for Senelec’s power plants to avoid the shortages that have caused many of the recent power cuts. This fund, according to national media, will be managed directly by the presidency.

Secondly, to lend force to these new measures, a National Energy Council has been created to oversee the programme’s implementation. The council, also directed by President Wade, will be composed of the prime minister; the ministers of energy, of finance and of the environment; the general directors of both the national refinery Société Africaine de Raffinage and of Senelec; a consumer representative; and one member of the Senelec restructuring committee.

The council will act at a taskforce, meeting on a weekly basis to evaluate progress. A permanent secretariat will be created to implement decisions taken by the council and oversee the day-to-day monitoring of Plan Takkal. The secretariat will be co-directed by the minister of energy and minister of finance and the economy.

While power shortages are likely to continue in the near term, the government has outlined an ambitious plan to respond to the major problems affecting the sector – insufficient fuel supply, a heavily indebted national electricity provider, inefficient energy usage and a crisis of consumer confidence – and looks set to put efforts to improve the nation’s energy prospects front and centre in 2011.

Mines and geology

With the new Mining Code, Senegal has a modern legislation, complying with the general orientation of WAEMU’s mining law. This code is aiming at redeveloping the mine sector.

It includes major innovations that are supposed to attract investment flow in the mining sector, that would promote the development of the exploration and exploitation of the significant mine resources in Senegalese soil and subsoil.

Phosphates

Phosphates are the country’s main mining resource.
The ICS are the main operators of the Taïba and Thies phosphates; ICS thus absorbs the major part of the production, which is estimated at 2 million t per year, 15% of Senegalese exports.
The subsoil has a potential of 12 million t of lime and 100 million t of alumina phosphates.
The Matam phosphates: a deposit of more than 40 million tonnes (28% of P205),which has not been exploited yet and is located 700 km from Dakar, alongside the Senegal River, in an area connected to the port of Dakar by a national asphalt road.

Iron ore

Iron deposits are mainly located in the far south-west of Senegal and their exploitation is carried out by MIFERSO (Eastern Senegal iron mines).

Reserves are estimated at 350 million tonnes, with an iron rate of 63%. Besides these reserves, Senegal’s subsoil could possibly hold 350 million tonnes of magnetic ore, according to surveys carried out by MIFERSO.

To allow for an optimal exploitation of the potential iron ore, the President of the Republic has decided to implement an ambitious programme articulated around 3 components, which is to be financed by the private sector, on the BOT mode (Build Operate Transfer) :

* Development of the mining sector
* This 293 million USD investment project includes the building of mining infrastructures, a power house of 150 MW, modern facilities for iron ore reduction. The production is estimated at 12 million tonnes for the first two years of exploitation; Railways
* This 426 million USD project includes the building of 311 km railway between the mine and the existing railway, as well as a 6 km scissors crossing between Diamniadio and the future mineral port of Bargny. The mineral Port of Bargny

This port costing 162 million USD, which is located 28 km from Dakar is designed for the heavy existing (Thies or Taïba phosphates) or anticipated mineral traffic (Matam phosphates, sulphur, iron and gold ore and gold in Eastern Senegal). A satisfying bathymetry would allow for a hosting of ships drawing 170,000 tdw.

Marble

Senegal has significant marble reserves (6 varieties) and ornamental stones estimated at 1.07 million tonnes.
These reserves are mainly located in the south-east and have not yet been exploited. The Dialokoto-Kédougou asphalting should help re-develop the exploitation of marble.

Gold

This sector is characterized by a strong presence of foreign mining companies in the east of the country, at the border with Mali (including AGEM, BRGM, ANMERCOSA, RANGOLD ASHANTI, GOLDFIELDS, SAMAX HANSA...).
The SABADOLA factory, which is planned to be taken over after an international call for tenders, has a daily production capacity of 600 t.
Natural gas :
There is a potential deposit of 3 billion m3 in Diamniadio, an area situated 60 km from Dakar.

Oil

Major offshore oilfields have been discovered at the border between Senegal and Guinea Bissau.
Cement works
Senegal has large reserves of limestone (956,390 m3 in 2001), which fuel the growing cement industry.

Senegal has two cement works:

* SOCOCIM (West African cement-producing company)
* CIMENTERIES DU SAHEL.

The cement production reached 1,539,300 tonnes in 2001, compared to the 1,340,500 tonnes produced in 2000, which is an increase of 14.8%.
Sales amounted to 1,531,000 tonnes (90% of the production is for the local market).
The launching of the CIMENTERIES DU SAHEL’s production should help fill the deficit in the cement offer. Their production capacities are estimated at 600,000t.

The official selling price of a ton of cement has not changed since August 1998, remaining at CFA F49,200 (EUROS75).

While mining currently accounts for a small portion of Senegal’s GDP, new exploration techniques, increased foreign investment and the construction of a new industrial transport infrastructure are expected to capitalise on underexploited minerals. The country is one of the world’s leading phosphate producers, with total reserves estimated to be more than 40m tonnes, but there are a number of other segments that have begun to take off, particularly gold, iron and zircon. A new greenfield project will increase iron production from 15m to 25m tonnes a year beginning in 2011. The project also includes the construction of a 750-km railway to transport the ore to the coast, electricity power production for the installations and a new deep-water port at Bargny along the coast, near Dakar. Zircon production is also ramping up and with global demand expected to reach 1.4m tonnes a year by 2010, Senegal is seeking to produce 25% of European demand and about 8% of the global need. Other exploration projects include those for uranium, lithium and tin. Once the requisite infrastructure has been upgraded, these resources will be ripe for development, and multinationals such as ArcelorMittal have already begun to express interest in the sector

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