TORONTO (miningweekly.com) – A global mining and energy solutions firm is offering miners the opportunity to swap resources for electricity, which could potentially open the door to juniors seizing the opportunity to introduce renewable power at their projects without carrying the burden of financing, engineering, constructing or operating the equipment.

Cronimet Mining - Power Solutions MD Rollie Armstrong told Mining Weekly Online last week that small companies with access to established resources, but which did not necessarily have capital for a $10-million hybrid renewables/diesel energy system, could potentially benefit from resources-for-energy agreements.

Cronimet Chrome SA director Moritz Hill added that the company had a significant trading background and this had helped it to facilitate commodity trading for energy.

He said Cronimet was engaged with “detailed talks” with a number of customers, but that no legal agreements were in place yet.

“We have to do a lot of due diligence in these deals, owing to offering the mining company the opportunity to monetise the resource before it is even out of the ground,” Hill explained.

Armstrong said that despite commodity prices being in the gutter and the current financing market for new mining projects being exceedingly difficult, company boards were looking increasingly harder at attaining shareholder value.

“When energy costs make up about 30% of your operating expenses, there is merit in investigating ways to reduce this. Boards seek to increase shareholder value, and through renewable energy there is an opportunity to reduce expenses.

“In fact, it is management’s fiduciary duty to interrogate ways in which to reduce operating costs,” he said on the sidelines of the Renewable Energy and Mining Summit, in Toronto.

Armstrong stressed that when times were tough, the focus had to fall on increasing margins.

PIONEERING TECHNOLOGY

Cronimet Mining - Power Solutions, formerly Solea Capital and the parent company of South Africa-based Solea Renewables, was pioneering the combination of photovoltaic (PV) energy with diesel generation sets to create hybrid renewable energy solutions. It specialises in developing, financing, integration, construction and operating its hybrid power facilities and utility-scale renewable-energy infrastructure worldwide.

The company constructed an initial phase of 1 MW off-grid solar PV plant that was integrated into the electricity supply system at its chrome mine, in South Africa’s Limpopo province.

The mine, which forms part of a larger international enterprise that supplies and recycles stainless steel raw materials, introduced the PV facility in an effort to reduce its reliance on diesel generators.

Until the end of 2012, the operation had been fully reliant on the generators, which were installed when the Thabazimbi-based mine was unable to secure a connection from national power utility Eskom.

The 4 170-panel facility spans a two-hectare area and was installed between August and December 2012, by solar contractor Solea Renewables and Cronimet Energy South Africa. The panels were imported from Jinko Solar, of China.

The solution is expected to have a payback period of less than four years and should operate for a period of 25 years – the mine reportedly had sufficient reserves to sustain mining for several decades.

The hybrid power solution generates electricity from the solar PV systems, integrated with the minimal use of diesel generators during the day, and switches over to full diesel generation for night operations.

Armstrong said that the plant produced about 1.8 GWh and is expected to displace 450 000 l/y of diesel fuel.

He explained that the diesel generators’ technical application was perfectly in line with the requirements of PV, resulting in the generator set interacting dynamically with the PV site. “We have recorded 20% to 30% reductions in diesel cost a year, and up to 60% in the daytime.

“The bottom line is that integrating renewable energy into mine operations saves on operating costs,” Armstrong stressed.

However, the main hurdle to renewable energy’s widespread application is the educational process. “We need to show customers that the PV plant won’t compromise the diesel generator set in any way, but [will] enhance the system, and that it really can provide a long-term hedge against increasing energy costs,” Armstrong said.