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Canada

Remote mines add wind

WORLDWIDE: More mining companies are recognising the benefits of using wind power in remote locations to cut diesel fuel bills and ensure secure supply.

Diesel support… Four Enercon turbines supply 10% of power to Canada's Diavik diamond mine
Diesel support… Four Enercon turbines supply 10% of power to Canada's Diavik diamond mine

Mines are often seen as dirty, energy-guzzling operations, having little regard for environmental concerns. But this is starting to change as mine owners turn to renewable energies — mainly wind and solar — to cut their fuel bills and CO2 emissions while securing certainty of supply.

The use of wind power in a remote mining operation could reduce the cost of energy by 10-20%, Michael Carreau, director of renewable power at global engineering consultancy Hatch, said last year. "Mining is one of the largest untapped opportunities for renewable energy," states Alicia Webb, senior policy adviser at Australia's Clean Energy Council.

Mines are typically in remote locations, often off-grid or facing erratic power supplies. As such they will be heavily reliant on diesel-fired generators, trucking in fuel at great expense or even flying it in when the roads are unusable. Wind power, therefore, has assumed greater importance given its cost-efficiency. In 2012, Rio Tinto added wind energy alongside its diesel power supply to ensure secure electricity at a reasonable cost at its Diavik diamond mine in northern Canada. It installed four Enercon 2.3MW turbines that have met 10% of Diavik's power needs, so far saving around $10 million in fuel costs.

The success at Diavik is one of the reasons why other remote mines are now looking at wind energy, notes Tim Weis, director of policy at the Canadian Wind Energy Association. Seeing projects up and running gives a level of confidence to mining companies. "What is holding back the wider use of renewable energy in remote mining operations is not so much the business case as a lack of familiarity with a suite of technologies that continue to fall in price," says Webb.

Legal and financial hurdles

Other barriers include the extreme weather conditions at some mines and maintenance risk in remote locations. The wind power must also be carefully balanced with other generation to ensure constant supply. And the upfront capital costs plus long-term payback of a wind farm may not fit with the mine's lifetime, which could well be under ten years, making it difficult to secure financing.

Mining rights can present another hurdle, especially in Chile, where it has been relatively easy for speculators to acquire and hold mining rights, blocking any other activity in the hope of being bought out.

But that hurdle is now being countered by the high cost of electricity, explains Carlos Finta, president of Chile's renewable energy association, Acera. With wind averaging $95/MWh in a recent government supply tender, against $110/MWh for conventional generation, mine owners are beginning to understand the advantages wind energy can offer. "We expect this will drive mining companies to consider (wind) as a real alternative," Finta says.

Antofagasta Minerals is leading the way, sourcing 20% of power at its Los Pelambres copper mine from the 115MW El Arrayan wind farm, which it co-owns with US power company Pattern Energy. The remaining power is sold on the spot market.

This strategy is likely to be a growing trend. "Many of the world's largest mining companies are evaluating greater use of renewable energy ... as part of a broader strategy to lock in long-term fixed electricity prices and availability while minimising exposure to regulatory changes, market pricing and external fuels," Ernst & Young said in its 2014 paper on renewables in mining.

International law firm Chadbourne estimates that mine owners will invest $20 billion in renewable-energy facilities by 2020. In Australia, wind energy can help access mineral resources at a lower cost than using diesel alone, with a very high level of reliability, Alicia Webb asserts. "That's a win-win for everyone."

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