Image: Deloitte
Using renewables as a major component of an effective energy management program, miners can slash their energy costs by up to 25% in existing operations and 50% in new mines says a Deloitte report released yesterday.
There are more than 400 operating major mines in Australia, digging up various metals, minerals and brrr.. coal. A major cost associated with mining (aside from externalised costs related to environmental impacts) is energy, which can account for approximately 30% of total cash operating expenses.
Miners in Australia are increasingly turning to wind and solar energy to help power their operations, and for good reason.
“With renewable energy fast becoming a mainstream energy source, mining companies have a material opportunity to use renewables to lower costs, improve safety, reliability and sustainability, and mitigate risks to ultimately gain a competitive advantage,” said David Cormack, Deloitte Consulting Mining Leader. “The ability to reduce emissions and preserve, or enhance, the mine’s social license to operate increases the size of the prize even more.”
Other opportunities associated with integrating renewables, assuming a mine is grid-connected, include selling excess generation capacity and providing ancillary services to grid operators.
Renewable energy options are particularly attractive for off-grid mines, where diesel based electricity generation is particularly expensive. On the issue of reliability, various prototype projects have proven to be technically reliable; even in extreme conditions such as those experienced in Australia.
However, Deloitte says extracting the full value from renewables requires more than just erecting a few wind turbines at a site or installing a bunch of solar panels.
“.. it requires a willingness to rethink operational processes and to reconsider the way work is done.”
As for mining execs still resistant to the idea of integrating renewable energy, Marlene Motkya, Deloitte’s Global Renewable Energy Lead Partner, has a simple message:
“The clean-energy movement is global, it is industry-agnostic, and it is irreversible.”
Deloitte warns mining companies that if they continue to kick the renewables can down the road, they may find themselves trailing the pack and being high cost producers trying to preserve their margins.
The full paper, Renewables in Mining, can be downloaded here (registration required). It offers some advice on how companies can get started on the road to renewables, even in the face cost or cultural constraints. It also provides some examples of mining firms that are making the shift and the benefits they’ve experienced.
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Rio Tinto recently announced they were completely divesting from coal and moving towards powering their mining activity by renewable energy sources. However on the other hand we have potentially the biggest coal mine in the world going up in the eastern states, which our government will most likely be subsidizing. Mad world.
BHP announced on 24th May 2019 : ‘The company said it expects coal to be “phased out, possibly sooner than expected”, and as such has no intention to grow its thermal coal portfolio “regardless of asset efficiency”.
‘BHP noted in the briefing that the external environment is changing rapidly in terms of bio-diversity loss, a heightened degree of policy uncertainty and technological progress in the cost of renewables.
You can read the source article here: https://www.esdnews.com.au/bhp-says-theres-no-future-in-thermal-coal/
Note the use of the word ‘rapidly’ in the above quote too.
The article also mentions that: ‘BHP follows its peers Rio Tinto, Woodside Energy and Glencore in backing away from coal, showing a broader trend in the industry.