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Mining companies urged to add renewables to energy profiles

Mining companies urged to add renewables to energy profiles

Photo by Reuters

3rd June 2014

By: Simon Rees

Creamer Media Correspondent

  

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TORONTO (miningweekly.com) – In the current climate of economic headwinds, squeezed margins and stubborn overheads, mining companies continue to examine all aspects of expenditure in the hope of making savings.

Energy consumption is one of the greatest costs, particularly for mining operations in remote areas with no access to national grids. In these instances renewable alternatives as an ancillary energy source are becoming an increasingly attractive, be it hydro, solar, wind or other options.

However, many of the advantages are inherent only over the longer term and several challenges remain, Mining Energy Advisors CEO Ingo Koenig and Enercon Canada executive director business development Adrienne Downey told members of the Canadian Institute of Mining’s Management and Economics Society on May 28.

CARROT AND STICK

The pressures that make renewables worth considering will continue to grow, Koenig stressed. First and foremost, this includes the rising cost of traditional grid power or diesel for remote locations. This can become a major headache when combined with flat or falling metal or mineral prices. “And it’s not something that’s going away,” Koenig warned. 

On the other hand, the cost of installing and operating a renewable power option is continuing to decline as uptake grows and the technology advances. “The cost of [installing] renewable technologies is going down, [as is] the cost of renewable energy on a kilowatt per hour basis,” Koenig said.

“For example, solar power has gone from being an experimental technology to being a mainstream energy source in many jurisdictions,” he added.

The drive by various governments to reduce carbon emissions and the growing regulatory developments stemming from this might add to the appeal of installing a renewable mix, he said. 

However, renewables accrue the greatest return over the medium to long term; the benefits in the short term are less attractive when compared against the initial outlay on equipment purchase, installation and operation.

“In the short term, it’s not really interesting economically … But the longer you run it [a renewable installation], the more your total savings over a project’s lifetime,” Koenig said.

LOCATION, LOCATION

Both Koenig and Downey stressed the importance of tailoring the right mix, type and level of renewables for a mining operation. Much of this is determined by the location of operation, particularly those in harsh climates or with tougher operating conditions.

“The technology has to be suitable and appropriate for the conditions,” Downey said. “We’re looking at things like exposure and storm conditions.”

“Logistics is a huge driver too,” she continued. “Sometime you’re talking about a mass of equipment that had to be brought up in sections. So how am I going to get the parts to the site? What are the integration solutions? How will this work with my existing diesel generation? How can I ensure this is complimentary with my existing assets? These are questions that need to be asked.”

“And what about the site’s capabilities?” she added. “For example, does it have a cement plant? Does it have the necessary operations and maintenance personnel?”

“So it’s not a cookie cutter solution. It’s a situation where all cards are placed on the table and we discuss who’s got what – the expertise that we can bring and what the mine operators can bring,” she said.

COLD CUTS

Wind power is one of the most attractive renewable options for operations in the far north of Canada. However, the turbines must be robust enough to not only withstand freezing temperatures but to continue operating as well.

“The viability of a [wind power] project depends on when there’s most wind. Well that’s during the middle of winter, so [things like] blade de-icing is an absolute must,” Downey said.

Downey cited Enercon Canada’s work with Rio Tinto at the Diavik diamond mine held by Rio Tinto as a case study. “We developed a partnership agreement with them and our service technicians were stationed on site for six months working hand-in-hand with the operation and maintenance personnel,” she said.

“In 2012 they built four turbines each with a capacity of 2.3 MW,” she continued. “The average penetration on the grid is around 8%, maximising up to its highest at 58%. It really depends on how much wind you have, which speaks to the intermittency [aspect].”

Because of its wind power option, the Diavik mine has been able offset of 4.3-million litres of diesel a year. “That’s a huge achievement for them not only in terms of savings but also in terms of added stability,” Downey said.

OTHER ADVANTAGES

Among other options, mining companies may consider a power purchase agreement whereby the energy is paid for but not the installation of the renewable power source or its maintenance. Under this model, the cost of electricity will also fall over time, Koenig said.

Meanwhile, renewables serve to facilitate community relations as many people react positively to mining companies that seek to diversify their energy mix in this manner, he explained.

Koenig also highlighted the positive legacy effect of renewables. “Solar panels will last much longer than 20 years: they’ll probably last 30 to 40 years if you maintain them well enough,” he said. “So energy from these panels could go on to support local communities, giving them a cheaper source of electricity.”

Some mining companies already see renewables as integral for their corporate social responsibility programmes. “For example, we recently had discussions with a miner in Africa that was interested in putting in solar panels on educational buildings right away,” he said.

Renewables also have a role in a mine’s decommissioning. “As part of your decommissioning, you might have to remove power lines. So how do you secure energy at this stage? Will you have to ship in diesel for decommissioning activities? Well why not put in solar panels?” he asked. “These are ideas that the industry should discuss more.”

Edited by Creamer Media Reporter

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