Remaining Challenges

Though using more renewable energy for mining operations will allow mining companies to tout their programs as more environmentally sustainable, considerable challenges continue to impede a more widespread implementation of the technologies. “The biggest limitation is in terms of scale,” Sussex Strategy’s Benedetti said. “To meet that [electricity] need solely with solar or wind power is very difficult or impossible to achieve. It has to be a combination of that and something else.”

Intermittent electricity generation from renewables, and especially wind and solar power, present a particular problem for the mining industry, Sediqi said. “With solar and wind, you don’t have constant energy generation,” he said. “Mining operations are very sensitive with energy usage, and it’s very hard to shut down some mining processes. For solar and wind energy, a penetration rate of energy of 30% to 40% is achievable, but above that, it is very hard to use renewable energy, and miners will still need to use diesel for 70% of their energy needs.”

The energy must be reliable, IAMGOLD Corp.’s vice president of investor relations, Bob Tait, said. “Generators don’t start on a dime like a car, they take time to warm up and reach the peak,” he said. “Until renewable energy offers base-load generation, it will never ultimately replace some of the other sources.” Another issue plaguing the renewables industry is a lack of capacity to store the energy generated on site.

Mining companies “have to be able to generate [energy] and store to use it when they need it, and not when it’s being produced,” Sediqi explained. “Storage is just too expensive at the moment to allow for higher penetration” of renewable technologies.

Raglan mine

One up-and-coming project that may yield a solution to the problem of renewable energy storage is at Glencore Xstrata Plc unit Xstrata Canada’s US$530 million Raglan nickel mine, in the far northern tip of Quebec in the Nunavik region, which has no available electricity grid. The project on Feb. 27 secured funding of C$3.5 million from the Quebec government that will support a pilot project for a wind turbine combined with a storage system for other renewable energy forms, Raglan communications coordinator Celiane Dorval said. An interesting article is also this profile of mining company Hwange Colliery Ltd.

The pilot project is slated to run for five years, although Xstrata Canada believes that it will take only two years to determine the project’s efficiency and whether or not it will invest in a full wind farm on-site. “What we expect is that the pilot project will allow us to reduce our diesel consumption of 2.5 million liters a year,” Dorval said. “Ultimately, the objective is to substantially reduce our fossil fuel consumption, and one of the biggest challenges for us is to reduce our environmental footprint and GHG emissions.”

The mine is expected to consume 60 million liters of diesel and emit 100,000 tons of carbon dioxide annually, Adrienne Downey, executive director of business development at Enercon Canada, sais. Enercon has been commissioned to construct the wind turbine at Raglan. The wind turbine and energy storage system, which will test three different technologies, will be constructed this summer, with the wind turbine expected to generate 3 MW of energy once it begins turning in the autumn. “The use of three different storage systems (battery, hydrogen, and flywheel) not only compensates for periods when the wind isn’t blowing but also stabilizes the grid,” Downey said.

Renewable energy outside of Canada

Many analysts said that the use of renewable energy at mining projects is likely to grow in the developing world, as governments adopt energy policies encouraging the use of renewables.
IAMGOLD already has a small-scale solar program at its Rosebel gold mine in Suriname underway, which will generate 5 MW in power. The Canadian miner is also considering implementing solar power programs at its Essakane mine in Burkina Faso.

“Power costs that we pay there are probably the most expensive that we pay anywhere because we truck in heavy fuel oil from the coast through other countries into the northeast corner,” he said. “We’re looking to see what solar can do, as the project is in the Sahel and there’s quite a bit of sunshine up there,” he added. “But there is extreme heat, and solar is not as effective in the high heat. So we’re looking at the best technology and costs, and we have a feasibility study underway to reduce some of the costs.”

Future of renewables in the mining sector

Analysts agree that renewable energy is likely to see a greater implementation rate in the future as miners scramble to cut ballooning fuel costs in this highly capital-restrictive period. Several factors might strengthen the pull of renewable energies for mining operations, which may include changes in regulatory regimes for stricter environmental standards and the possible implementation of a carbon tax, increasing the appeal of renewable technologies.

Mining Energy Advisors’ Sediqi thinks refiners will also play a pivotal role in the increased adoption of renewable energies. “Refiners tend to be more energy-efficient,” he said. “They might bring their skill and knowledge back to mining companies as well” should they opt to employ renewable energies, he said. He also foresees great strides in storage technology. “We think that energy storage solutions will be the next big thing that we will see a huge price decrease in,” he said. “Based on that price decrease, we think it will enable renewable energies to offset diesel stronger than is possible right now.”