JOHANNESBURG (miningweekly.com) – Chile, South Africa and Australia are among the key mining markets that are ahead of the curve when it comes to incorporating renewable energy into the power mix at mines and projects, supported by favourable climates, government policies and elevated power costs, according to Fitch-owned market analysis company BMI Research’s recently published report on the mining industry’s use of renewable energy.
BMI stated that, globally, miners will increasingly look to renewable energy to reduce power costs as mineral prices remain subdued over the coming years.
The report highlighted that Chile, South Africa and Australia would emerge as global leaders in the mining industry's shift to embrace renewable energy as a cost-competitive, environment-friendly power source.
It also noted that these countries’ well developed mining sectors, favourable climates, policy incentives and economic incentives would support renewable energy projects at mines.
Further, while countries such as China, India and the US boast significantly larger mining industry values and volumes of solar and wind capacity, powering mines in Chile, South Africa and Australia still remains more of a challenge owing to remote locations, insufficient or unreliable grid systems.
SOUTH AFRICA
According to the report, power supply uncertainty remains a key challenge for miners in South Africa, making independently sourced renewable power plants a particularly attractive option.
For instance, in a 2015 report, gold miner Sibanye Gold noted that electricity costs increased by 13%, largely owing to State-owned power utility Eskom’s yearly 12.7% electricity increase.
CHILE
BMI noted that Chile would remain a global outperformer in renewable energy use in the mining sector, as renewables’ increasing cost-competitiveness and security of supply prove preferable to diesel or grid power alone.
As Chile's copper miners continue to contend with rising costs stemming from declining ore grades and freshwater scarcity, cost-saving tactics will remain a key strategy.
BMI says that energy costs can reach up to 40% for remotely located Chilean mines, where access to power grids is often unfeasible and relying on diesel is particularly
expensive.
AUSTRALIA
Australian miners will increasingly use renewable energy as a supplemental source of power for mines, supported by natural climate conditions and favourable government policies.
The country hosts a number of the world's largest miners, which makes the sector well positioned for investment.
In June, Australia’s Sandfire Resources’ offgrid solar power project at the DeGrussa copper mine became fully operational.
The 10.6 MW solar array, along with a 6 MW lithium ion battery storage facility, will be fully integrated with the existing 19 MW diesel-fired power station, reducing diesel use by 20% a year.