Interviewer view · keep this screen to yourself
Standard: Tlhakodi Chrome: should a mine build its own solar plant?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Tlhakodi Chrome runs a chrome mine in South Africa. It is considering building its own solar plant with batteries. Should it?
Format note: Difficulty: Standard. Format: candidate-led, with interviewer dialogue. Industry: Mining and energy. Region: South Africa. Interview length: about 30 minutes. The company is fictional and all figures are illustrative.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: How much power does the mine use, and at what price?
Answer: About 200 GWh a year, bought from the national utility at about ZAR 2.00 per kWh.
If asked: How much do power cuts cost?
Answer: National load-shedding has become rare, but outages on the local network still stopped production for about 10 days last year (illustrative). Each lost day costs about ZAR 5 million of margin.
If asked: What would the solar plant cost and produce?
Answer: A 50 MW solar plant with batteries costs ZAR 1.2 billion (ZAR 1,200 million), produces about 100 GWh a year, costs ZAR 20 million a year to run, and would avoid about 60 percent of the lost days.
If asked: How should I compare options over time?
Answer: Use 15 years and 10 percent. At 10 percent, ZAR 1 a year for 15 years is worth about ZAR 7.606 today.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
The plant saves on the power bill and on lost production. My hypothesis is that it pays back well within its life, but that a cheaper option without an upfront cost may exist.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Compare the value of each power option over 15 years
- Today: the power bill and the cost of outages
- Key: Own plant: savings, running cost, investment
- Other options: buying solar power from a developer
- How many outage days change the answer
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Power bill today
What a strong candidate does: Candidate: "200 GWh is 200 million kWh, so at ZAR 2.00 the bill is, in ZAR million:"
Power bill (ZAR million a year): 200 × 2 = 400
Step 2: Cost of outages
What a strong candidate does: Candidate: "10 lost days at ZAR 5 million each."
Outage cost (ZAR million a year): 10 × 5 = 50
Step 3: Yearly benefit of the own plant
What a strong candidate does: Candidate: "100 GWh no longer bought, plus 60 percent of outage costs avoided, minus running costs."
Yearly benefit (ZAR million): 100 × 2 + 0.6 × 10 × 5 - 20 = 210
Step 4: Payback
What a strong candidate does: Candidate: "ZAR 1,200 million divided by the yearly benefit."
Payback (years): 1,200 ÷ (100 × 2 + 0.6 × 10 × 5 - 20) = 5.71
Step 5: NPV of the own plant
What a strong candidate does: Candidate: "Yearly benefit times 7.606, minus the investment."
NPV own plant (ZAR million): (100 × 2 + 0.6 × 10 × 5 - 20) × 7.606 - 1,200 = 397
Step 6: Curveball: a power purchase agreement
What a strong candidate does: Interviewer: "A private developer offers to sell the mine 100 GWh a year of solar power through the national grid at ZAR 1.40 per kWh, with no upfront cost. Because the power comes through the grid, it does not help during outages. The mine can use only about 100 GWh of solar power a year, because much of its load is at night, so it is one option or the other." Candidate: "The yearly saving is:"
Yearly saving (ZAR million): 100 × (2 - 1.4) = 60
Step 7: NPV of the agreement
What a strong candidate does: Candidate: "No investment, so the value is the saving times 7.606."
NPV of the agreement (ZAR million): 100 × (2 - 1.4) × 7.606 = 456
Step 8: Outage days that make the own plant win
What a strong candidate does: Candidate: "The own plant wins only if the outage savings close the gap. Each lost day avoided is worth 60 percent of ZAR 5 million."
Break-even outage days a year: (100 × (2 - 1.4) + 1,200 ÷ 7.606 - 100 × 2 + 20) ÷ (0.6 × 5) = 12.59
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Sign the power purchase agreement unless outages are expected to rise above about 12.6 days a year. First, the own plant is a good project on its own: it saves about ZAR 210 million a year, pays back in under 6 years, and has an NPV of about ZAR 397 million over 15 years. Second, the agreement is worth more, about ZAR 456 million, because it needs no upfront capital, even though it does not protect the mine during outages. Third, the own plant wins only if outages cost more than about 12.6 days of production a year, against 10 days last year. The mine should sign the agreement, keep its ZAR 1.2 billion for mining, and buy a smaller battery or backup system sized only for critical equipment during outages.
Risks a strong answer names: Grid charges for moving power through the network could rise; Outages could return at a higher level than expected.
Next steps: Check the grid and network charges in the developer's offer; Price a smaller backup system for critical equipment.
Strong versus weak
A strong answer
Valued both options over the same period, saw that the agreement does not help during outages, and found the outage level that changes the answer.
A weak answer
Chose the own plant because its payback is short, without comparing it with an option that needs no capital.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?
Total
0 out of 25
Score all five criteria to see the band and the feedback template.