SUSTAINABLE POWER SOLUTIONS FOR MINING APPLICATIONS
MINING AND RENEWABLES: THE RIGHT COUPLE
To many people outside the industry, the marriage of mining and renewables might seem an odd one. However, according to a comprehensive article from global law firm Watson Farley & Williams (via Renewables Now), it is one that makes sense and is likely to last.
Why odd? The mining sector has always struggled with its image as a “dirty” industry. The ESG (Environmental, Social and Governance) Sector Risk Atlas produced by S&P Global rates industry sectors’ exposure to environmental and social risks on a scale of 1 to 6, 1 being low risk and 6 being high. Mining and metals achieved a full 6 out of 6 on the environmental risk scale and 5 out of 6 on the social scale, placing it on par with oil and gas among the most dangerous industries measured.
Investors clearly are sensitive to such perceptions. WF&W cites reporting from The Financial Times that the number of institutional investors pledged to completely remove fossil fuels from their portfolios by 2030 jumped from 180 in 2014 to over 1,100 by 2019. Other signs that the mining industry will face a harsh investing environment include the European Central Bank’s 2020 guidance to banks to price their loan products in correlation to the environmental risks of their borrowers.
Reduced reliance on fossil fuels that are vulnerable to global price fluctuations
Reduced carbon emissions, particularly for mines that consume a lot of electricity
Satisfaction of environmental and social criteria — often required by off-takers as
well as financiers
Improved investor engagement
Stability in power price
However, mining is also key to the growth of renewable energy, as green technology is heavily reliant on certain metals and minerals.
In light of this necessity, and along with recent advancements in renewable energy technology, miners and their investors are increasingly seeing clear incentives to accelerate the switch to renewables:
According to The Financial Times the number of institutional investors that pledged to completely remove fossil fuels from their portfolios by 2030 jumped from 180 in 2014 to over 1,100 by 2019.
Fortunately, progress is being made toward these objectives across the globe. Chile’s 34 MW Pampa Elvira solar power project annually contributes 54,000 MWh of thermal energy to the Gabrial Mistral copper mine, replacing 85% of the fossil fuel used in the electrowinning process, resulting in an annual reduction in CO2 emissions of 15,000 tonnes. Australia already meets 23.5% of its total energy demand through renewable energy sources and “cruised” over its 2020 renewable energy target.
The Mauritanian government was an early investor in the hybridization of the power supply to its coal mines in Zouerate, while South African miners also have projects in the pipeline, including a 200 MW solar plant planned by Sibanye-Stillwater and a 40 MW solar park by Gold Fields at its South Deep gold mine in Gauteng. A recent report by Fitch Solutions Macro Research, revealed that around 1 GW of renewables was already built at mining sites across the world, and that another 1 GW is in the pipeline.
The article concludes, “It is therefore very clear that the mining and renewable energy industries will have, and need to have, a strong future, symbiotic relationship. The renewable energy industry needs metals and minerals to be mined to enable the path towards net zero carbon. Likewise, the mining industry will rely more and more on renewable energy to drive its development from a dirty image to a clean one, and thereby maintain and enhance investor appetite.”
Read the full article here.
BILLIONAIRE MINER LAUNCHES CLEAN POWER FUND
Per a recent article on mining.com, billionaire executive chairman of Ivanhoe Mines, Robert Friedland, is raising $200 million to invest in industries key to the global energy transition. Friedland’s special purpose acquisition company (SPAC) plans to target companies in industries related to the “paradigm shift” away from fossil fuels.
This venture is another example of movement among energy and raw-materials producers toward low-carbon power sources, with customers demanding less-polluting supply chains and investors seeing opportunity in products that promise to help slow global warming.
The article quotes from the company’s recent US regulatory filing: “Over the past decade, the growing impact of climate change has begun to create significant urgency to manage our global carbon emissions.” Rules to limit carbon emissions, “together with the heightened focus on environmental and social governance by the private sector, has precipitated a paradigmatic shift in the global economy towards electrification.”
The filing lists as potential objectives companies mining or processing metals necessary for electrification, such as copper, nickel and the platinum group metals, as well as battery manufacturers and producers of electric vehicles.
Read the full article here.
GOLD FIELDS GETS NOD FOR SOUTH AFRICA SOLAR PLANT
Mining Weekly reports that the electricity subcommittee of South Africa’s national energy regulator (Nersa) has recommended approval of Gold Fields’ licence application for a 40 MW solar PV project to be developed at its South Deep mine in Gauteng. The application is likely to be on the agenda for approval at the next meeting of the Energy
Regulator, scheduled for February 25. The 40 MW project will represent between 20% and 25% of the average consumption of the undergound South Deep mine, located near Carletonville.
Per the article, the application has garnered much attention as it has highlighted the challenges associated with securing a generation licence in South Africa. Nersa’s cumbersome licensing processes have required three years to date, during which time Gold Fields has been able to fully complete construction of a 23 MW renewables plant at its Agnew gold mine, in Western Australia.
These licensing difficulties are not unique to Gold Fields and have prompted calls for South Africa to lift the licensing exemption threshold from 1 MW to 50 MW to help facilitate investment. In an important recent development, Eskom has expressed its support for the lifting of the exemption if such a move is accompanied by certain tariff reforms.