Given this background, it is not surprising that mining corporations are looking to the opportunities that renewable energy presents as one of a range of solutions to becoming a more sustainable industry. By necessity, mining is an energy-intensive process, especially for elements that are more difficult to extract (and therefore require additional machinery), or that require electricity for refinement (such as aluminium smelting). Mining operations have therefore always needed a consistent and reliable source of power to meet their day-to-day requirements.
The remote location of many mining operations, coupled with the need for a consistent baseload, has historically required heavy fuel oil (HFO) generators that, whilst being highly polluting, are reliable and can therefore meet the demands of the mine. This has been at odds with the intermittency of most renewable energy sources (outside of hydro and geothermal), because if the sun is not shining, or the wind fails to blow, no power will be generated, and no power means no mining or falling back on HFO power sources. More than that, however, offtakers and other supply chain participants are making their views known: mines that produce raw materials have to focus on maximum ESG potential, and that requires a mine to use renewable energy sources wherever possible.
The Chilean mining industry was an early adopter of renewables. With much of its mineral deposits being based in the remote Atacama region (which also happens to have the highest solar incidence in the world), renewable energy solutions have been deployed as a necessity to provide low-cost power to sites that would otherwise need significant capital expenditure to link up to the national grid or be forced to rely on HFO fuelled generators. As early as 2013, Codelco (the state-owned copper mining company) developed the 34 MW Pampa Elvira solar power project that annually contributes 54,000 MWh of thermal energy to the Gabrial Mistral copper mine, which replaces 85% of the fossil fuel used in the electrowinning process, resulting in an annual reduction in CO2 emissions of 15,000 tonnes¹³.
The Australian mining industry is also latching onto this trend. Australia already meets 23.5% of its total energy demand through renewable energy sources and “cruised” over its 2020 renewable energy target¹⁴. This undoubtedly provides confidence to all industries, including the mining sector, that solar and wind energy is a viable alternative to fossil fuels. Early examples of the transition to renewable energy include Sandfire’s DeGrussa copper and gold mine development of a 7 MW solar power project, with a 6 MW lithium-ion battery¹⁵, and the Sun Metals 116 MW solar farm in Queensland (self-financed for AU$182m)¹⁶. In March of this year, Rio Tinto announced plans to invest US$98m in a new 34 MW solar PV project with 12MWh of battery storage at its iron ore mine in the Pilbara region of Western Australia, which is expected to meet 65% of the mine’s average electricity demands and 100% of its needs during peak solar power generation times¹⁷.
