The high demand for energy, coupled with the need for operational savings and the need to deal with challenges posed by the environment and social aspects, is making renewable-energy solutions an increasingly attractive alternative to powering mines in Chile.

Information and event media provider Mines and Energy published a market overview of the key drivers and challenges involved when adopting renewable-energy solutions in a Chilean mining scenario last month.

The ‘Why do renewables make sense for Chilean mines?’ report precedes the provider’s second yearly Energy and Mines Santiago Summit.

The summit will focus on highlighting energy resources in the South American mining industry run from May 16 to 18.

Taking into account Chile’s abundance of renewable-energy and mineral resources, its deregulated electricity market and government support for sustainable alternatives, the mining industry has become an attractive target for renewable-energy developers and providers in the country.

Energy and Mines market report also outlines the growing appetite and business opportunities for renewables in the country’s resource sector.

It contains interviews with key industry representatives, such as Teck Resources senior electrical engineer Marcos Cid, who says mines need to secure an energy supply 24/7: “We are considering different solutions and we see renewables as a key alternative for this challenge.”

He adds that developing supply deals incorporating renewables will guarantee competitive prices and sustainability, which are the two major goals for mining companies in Chile.

The country’s resource sector is the biggest consumer of electricity, accounting for 33% of its total energy demand, with mines traditionally having to cover high electricity costs, compared with costs in neighbouring countries.

The electricity that mines use in Chile accounts for between 20% and 40% of their operational costs, which drives miners in the region to explore alternative options to reduce and stabilise energy prices.

The report claims that Chile is the world leader in integrating renewable power into its mining industry’s electricity make-up, with mining majors including Antofogasta Minerals, CAP, Collahuasi, Codelco, Mandalay Resources and Nyrstar realising the energy-savings benefits of alternative technologies to fossil fuel-based solutions.

Regional operators, including Gold Fields, Barrick Gold, KGHM, Yacimientos Mineros de Agua de Dionisio, U308 Corp, Sociedad Química y Minera, Teck Resources and Minera Rafaela, are assessing renewable-energy options for grid-tied and remote sites, despite a recent decrease in energy costs and a challenging business environment.

Minera Rafaela, in Chile’s remote Valparaiso region, is using solar energy to meet 70% of its operational energy requirements. Mine project manager José Miguel Ibarra says Minera Rafaela’s use of solar energy represents not only an economic benefit but also a key operational advantage because it enables the mine to be more independent than if it were using traditional energy sources. It also reduces the mine’s reliance on diesel for generators.

“We use solar to pump water for drilling purposes, illuminate the operation and supply power to our camp, which also increased the quality of life of our employees,” he says.

The Chilean government has also set strong targets for renewables, which is changing the energy mix for mines connected to the grid. Government’s target is for 20% of the country’s electricity to be from renewable resources by 2025.

In the latest public tender, issued in October 2015, government gave all electricity distribution licences to renewable-energy companies, including Aela Generación, Abengoa, Grupo Ibereólic, Solarpac and First Solar.

Renewables are expected to take the lead in the Chilean government’s next energy auction this month for yearly supplies of 12 500 GWh, expected for delivery by 2020 and 2021.

Low oil prices, sluggish energy demands and the increasing presence of renewables in Chile have recently caused a drop in spot electricity prices.