Friday , April 12 2024

Long-Term Energy to Redefine Mining Resilience

By: Kweku Frempong, Head of Sales for Aggreko Africa

In South Africa, the mining sector uses around one-third of the local power supply Asia represents most of the world’s industrial sector growth with energy consumption increases of around 1.7% a year. In the Middle East, mining is forming part of the region’s growth in providing battery-grade materials and is under pressure to find alternative energy resources and sources to mitigate its energy impact and leverage cleaner and greener energy solutions.  The sector needs long-term, highly capable energy solutions that can support its immediate energy expectations while allowing it to evolve towards more sustainable power supply solutions.

Mining companies have long been focusing on investing in energy architecture that helps mitigate this reliance on grid-based power as they want to become greener and make inroads into the UN SGDs, by building stable power infrastructure that isn’t falling victim to loadshedding and grid instability. Locally, mining has emphasised its commitment to alternative power options as a way of freeing up more power for the rest of the country, as well as to becoming more sustainable.

It’s a move that will transform the industry in more ways than one. It can significantly reduce the energy cost to a company which traditionally is one of the sector’s biggest expenses. Deloitte research found that this is a price tag that’s around 30% of total cash operating costs and that this can be measurably reduced by up to 20% through effective energy management and mine design. That’s a significant amount and one that cannot just reduce the cost factor but the carbon footprint, sustainability and climate factors at the same time.

Achieving this takes several steps, and the first is to unpack exactly what your priorities are and what you need to focus on to ensure that your energy remains sustainable and relevant. This includes understanding the environmental, social and governance (ESG) guidelines you must manage, available fuel sources and solutions, the speed to market expectations and fuel requirements.

Once these needs have been carefully defined, you can then develop a more strategic approach that determines which energy solution is best placed to fit your ESG and energy goals. Examples include a highly efficient energy solution that allows for you to switch to a lower emission thermal fuel or hybridising the energy mix with renewable energy for both the long and short term – the final solution ultimately should be structured around your business.

During this stage, it is important to consider the size of the demand load, what solutions would give you the lowest cost of electricity (LCoE) as well as carbon emission reduction. There needs to be a balance between the three key priorities of power supply projects, which are decarbonisation, security of supply or reliability, and LCoE. Focusing on just one priority can be to the detriment of another, resulting in either comprised security of supply, lower decarbonisation or expensive electricity.

The second step is to determine the speed at which your company wants to make the move from its legacy energy provision sources. If you need power at speed, there are bridging power options available in the market that allow you to remain stable within your energy portfolio while you model your power demand based on load profile and develop a solution that aligns with your longer-term needs.

Third on the list is to understand your risk profile and what level of flexibility your business requires as it moves forward into its new energy portfolio. The sector is volatile which means that your business is impacted by economic, political and social fluctuations and you don’t want to be locked into a solution if your mine needs to terminate early due to hardship or a price crash. This is a risk that must be considered before investing in a solution, along with project and finance flexibility. You want a solution that’s flexible and capable of adapting to your mine’s usage and that can be charged based on consumption while still offering the security of guaranteed minimum offtake.

Investing in an agile and flexible hybrid energy portfolio that evolves with the business does deliver measurable benefits. Integrating different energy commodities does come with some complexity though and requires a deep understanding of the intrinsic capabilities and technical constraints of each element in the solution.  Aggreko has a proven history of working with mining companies to design customised hybrid solutions that balance the priorities and deliver the best results for the reliability of supply, and the lowest cost of energy and support the organisations on their decarbonisation journey.

The Gold Fields mine in Atacama, Chile, will save $7.4 million in their total cost of energy savings, reduce 10,511 tonnes of emissions, and save $1.1 million in carbon taxes. The hybrid power platform implemented by the mine combines 16MW of diesel and 9.9MW of solar PV power generation in an energy-efficient solution that was tailored to the mine’s unique environment and location. For the Resolute Mining gold mine in Mali, Africa, the savings included a 40% reduction in the total cost of energy, a 20% reduction in CO2 emissions, and $10 million in estimated cost savings in the first year of operation. This mine’s technical platform ran over two stages and included 10MW thermal Wartsila with 10MW Wartsila Modular Block and 20MW solar PV power added in stage two. This hybrid blend was designed around the existing infrastructure and power demands.

Aggreko has a proven history of supporting mines across Africa, the Middle East and Asia in their journey towards more sustainable power supplies. Aggreko collaborated with Resolute Mining Limited to create the world’s largest off-grid mining hybrid that blended thermal, solar, and batteries on a 16-year contract. The company saw a cost saving of nearly $10 million in the first full year of operation and saw the long-term reduced environmental impact that resulted in mine sustainability. The Syama Gold Mine bypassed the challenges it was experiencing with unstable power and unavailable supply by creating a hybrid solution that could consistently meet its power needs, without having to carry the weight of infrastructure or equipment costs. In Asia, Aggreko implemented a hybridised solution to deliver carbon, fuel and financial savings to the Batutua Tembaga Raya (BTR) copper mine.

This proves that mining companies can fundamentally change their power portfolio and the costs associated with energy management by investing in alternative solutions that allow them to optimise and refine their energy usage and production. Creating the right solution just needs the right partner, and the right methodology to ensure that it fits within your mine’s unique operating conditions.

 

 

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