Increasing synergies lead to reduced energy costs, improved environmental performance, and a greater social impact
“Miners have the opportunity to drive down energy costs by up to 25% in existing operations and 50% in new mines through an effective energy management program, of which renewables are a major component. In addition to cost savings, the ability to reduce emissions and preserve the mine’s social license to operate increases the size of the prize even more.”—Deloitte, 2017
The mining and renewable energy sectors might not typically be considered allies. One industry is rooted in environmental concerns around climate change. The other, part of a long history of natural resource development, often finds itself at odds with the environmental movement. But now, it’s clear that the two industries are reaching a moment that will mark the start of a mutually beneficial relationship.
How? The two industries don’t go hand-in-hand. Or do they?
The demand for solar panels, wind turbines, and battery technology has boomed as the world strives toward cleaner forms of energy. Most of the material needed for those technologies is in the ground—it needs to be mined. In fact, 14 of the 19 metals and minerals needed to build solar panels can be found beneath Canadian soil.
This inflection point creates an opportunity that could prove prosperous for both sectors and the businesses and stakeholders affected by them. By working together, the renewable-energy industry can access its much-needed metals and materials and diversify its client base, while the mining industry can realize the benefits related to reduced energy costs, improved environment performance, and an enhanced social license.
Mine energy considerations and the business case for a partnership
Although labor is the largest contributor to a mine’s total operating costs, several factors can affect profitability, such as:
- Remote locations: access to fuel, transportation, security, and diesel price
- Reliability and quality of grid-dependent energy
- Greenhouse-gas emissions and carbon pricing
- Managing environmental effects
- Achieving social license and creating value for communities and stakeholders
All those aspects play a role in a mine’s profitability. But the second highest cost after labor? Energy in all forms. Consider the power needed for lights, tools, and fuel stations at a mine. Think of all the computer technology, monitoring systems, and infrastructure used daily.
_q_tweetable:The demand for solar panels, wind turbines, and battery technology has boomed as the world strives towards cleaner forms of energy. Most of the material needed for those technologies is in the ground—it needs to be mined._q_
The kilowatt/tonne (kWh/ton) of metal produced is becoming a key performance indicator within the mining business and will only increase in importance in the near future. The more we can reduce the cost of power and use renewables the better off we will be as an industry and as a culture. As the cost of capital and operating expenditures goes down, values related to avoiding fuel costs, stable power, and reduced CO2 emissions start to increase.
An example at SunMine
To help illustrate some of these synergies—as well as the range of potential benefits related to investment in renewable energy—we can look to the example of SunMine in British Columbia.
In 2001, the Sullivan Mine, located near Kimberly, closed after 90-plus years of operation. The mine had primarily extracted lead, zinc, and iron. Since closing, the land has been undergoing a substantial decommissioning and reclamation process, including the development of SunMine—British Columbia’s largest solar project.
Built on the reclaimed mine site, SunMine begun commercial operation in 2015. With more than 4,000 solar cells on 96 trackers, the project has the capacity to produce 1.05 megawatts (MW). That’s enough energy to power 200 homes with clean renewable energy. In fact, Sun Mine is the first solar project large enough to sell power to British Columbia’s energy provider, BC Hydro.
Teck Resources, Canada’s largest diversified resource company, provided the reclaimed land as well as the site infrastructure. They also issued a $2 million contribution to get the project off the ground.
Check out the energy production in SunMine’s first few years of operation:
Since going into operation, SunMine has realized its original business case with the delivery of clean power and an ongoing stream of revenue, underscoring the reliability of the technology. But, the sustainable worldwide benefits of SunMine go beyond just clean power. The site has been a successful example of how to pursue renewable energy by repurposing an industrial site, and it provides long-term benefits for British Columbia.
The application of renewable energy not only promotes clean power, it furthers knowledge within the industry through ongoing experience and innovation. Industry experts can apply new and expanded ideas throughout different regions, based on the experience of SunMine and other projects. It also allows for sustainable use of reclaimed land post mine closure.
Mining companies worldwide are starting to catch on. As of of this writing, the Rocky Mountain Institute’s Renewable Resources at Mines tracker has identified more than 2 GW of wind and solar capacity installed at 57 sites. It’s clear that the plummeting costs of wind and solar are competing with the environmental upside to propel mining companies to renewable-energy solutions.
The most rewarding aspect of investing in renewable energy at mine sites? The long-term community investment. Adding renewable energy to a mine’s portfolio builds a stronger social license—it shows we care about the neighboring communities. And, at the end of day, that’s what counts most.
About the authors
Brian Yates is a vice president based in Vancouver, British Columbia. Brian has spent his career leading large-scale environmental assessments and consultation efforts for a range of energy, ports, mining, and linear infrastructure clients
Jon Treen is a senior vice president of our Mining team based in Charlotte, North Carolina. Jon has dedicated his career to improving mine operations all over the world.