• Alternative thinking

    As electricity increasingly becomes more expensive, miners are looking to renewable energy sources to electrify their operations.

    Alternative thinking

    In order to meet its significant energy demands, the mining industry has traditionally relied on fossil-based fuel sources such as diesel, oil, coal and natural gas. But times are changing, costs are increasing and the industry has been forced to investigate alternative energy sources. Hence renewables are on the rise in mining operations around the world.

    Indeed, several South African-based mining companies are already incorporating energy generated from renewable means into their power grids. However, for most, the question of whether or not to make the significant financial investment into renewable energy has gone beyond matters of sustainability and social responsibility to instead an undisputed economic motivator and strategic imperative.

    SRK Consulting (Africa) corporate consultant Roger Dixon believes that South Africa is a leader in implementing renewable energy projects. ‘SRK is already involved in a number of wind, photovoltaic and hydro-power projects around Africa, and the continent can take a leading role in exploiting renewable resources as effectively as mineral resources,’ he says.

    ‘Just as mineable reserves are determined by considering mitigating factors, so we need to contribute to the science of commercialising our renewable resources in ways that are socially responsible, environmentally sustainable and commercially profitable.’

    Dixon adds that the idea of relying solely on a single, state-owned national grid is being overtaken by more innovative concepts. ‘Mines located close together by virtue of geology could collaborate, for example, on a localised “mini-grid” serving their needs, while sharing costs with other stakeholders and bringing energy to remote areas.’

    According to Sven Lunsche, Gold Fields vice-president for corporate affairs: ‘Renew-able energy makes sense. The main reason is that mines are often located in remote areas where access to public power infrastructure can be poor or badly maintained. Generally, mines are self-contained operations with large areas on which they operate and often require separate power infrastructure from public utilities. So in that sense they are ideal.’

    Lunsche feels that the common attitude of the mining industry as far as renewable energy is concerned, has changed over the years partly because energy costs have risen quite sharply of late. ‘Previously there was an attitude of “there’s power there so why should I bother what source it is?”. These days the costs of conventional energy have risen, so renewables are the alternative to look at.’

    In its commitment to sustainable energy solutions, Gold Fields initiated a renewable energy project at its South Deep operation.

    This forms part of the company’s five-year energy security plan, which commenced early in 2015 and saw 25% completion by the end of the year. A necessary component of the plan is the use of solar power at the mine. After extensive techno-economic studies by the Richard Branson-sponsored Carbon War Room – Rocky Mountain Institute – South Deep last year 2014 issued an initial expression of interest for a 40 MW on-site photovoltaic solar electricity generation plant. Since then, some 10 firm proposals have been made by independent power producers.

    Several South African-based mining companies are already incorporating energy generated from renewable means into their power grids

    Lunsche says that the company expects to make a final decision by mid-2016. ‘The maximum capacity at the mine is 75 MW, so we’ve asked the bidders whether this can go higher.

    ‘At the moment we are looking at 40 MW. Storage is another consideration and we’ve asked bidders to include proposals for electricity storage. This might not be an immediate reality but perhaps in two or three years’ time.’

    Lunsche is of the opinion that the uptake of renewables in mining is largely motivated by economic factors. This was certainly the primary motivator for Gold Fields. ‘In our case power used to be 10% of our costs, say six or seven years ago. Now it’s over 20% – in some cases up to 22%. If we look at South Deep there is cost parity. That’s the main reason.

    ‘We have also found – especially in emerging markets, that the power supply from utilities has become unreliable, such as in Ghana, for example. In South Africa it’s better, but we are still operating at 10% less than before the power crisis,’ he says.

    At the end of March this year, Impala Platinum (Implats), in partnership with the University of the Western Cape, unveiled a prototype hydrogen fuel cell forklift and refuelling station at its Impala Refineries in Springs.

    Implats intends to use hydrogen fuel cell technology as its main source of energy for material handling and underground mining equipment. Fuel cells are a collection of technologies that use electro-chemical processes rather than combustion to produce power. The technology reduces heat, noise levels, and noxious and sulphide emissions underground – thus significantly improving ventilation requirements.

    Implats has invested significantly in energy conservation programmes in recent years, with a focus on fuel cell technology. The company’s longer-term strategic investments include exploring a carbon-neutral fuel source for its operations.

    ‘These new applications are an exciting development in Implats’ move towards exploring a carbon-neutral fuel source for our operations and a practical example of our participation in collaborative efforts to develop fuel cell technologies and a vibrant, sustain-able local fuel cell sector,’ says Fahmida Smith, Implats’ Impala Refining Services fuel cell co-ordinator.

    Harmony Gold is also working to find sustainable solutions. ‘Potentially, a good percentage of our operations can run on renewable energy,’ says Melanie Naidoo-Vermaak, environmental management executive at Harmony.

    ‘Solar will be able to cover the daytime consumption, with wind assisting to fill in some of the evening consumption, provided one could wheel from the sources of generation. In addition, bioenergy can serve as a substitute for electricity and heavy fuels, and at the same time support other imperatives such as rehabilitation, carbon management and job creation.’

    For the attractiveness and resultant uptake of renewable energy in mining operations to increase, power supply has to be cost effective and constant

    By the end of the most recent financial year, four demand-side management and eight Harmony-funded projects had been implemented, with 17 additional initiatives identified and in various stages of investigation or implementation. These projects have a budgetary requirement of ZAR55 million, which once completed, will result in a combined total annual energy saving of 64 040 MWh.

    Harmony is also currently assessing various energy-generating initiatives for the land it owns in South Africa. One of these is a bio-energy project involving the propagation of bio-crops on mine-impacted land in the Free State, to generate natural gas as a substitute for fossil fuels in the company’s Harmony One gold plant elution and carbon regeneration circuits.

    At the company’s Kusasalethu operation, three 3.1 MW power-generating turbines have been commissioned. These generate power from surface mine water transported underground. As less water is now consumed by the mine, the targeted power-generation capacity has been reduced. The energy is fed directly into the mine grid, reducing Harmony’s Eskom consumption and amounting to an annual cost saving of some ZAR6.1 million.

    Dixon believes that in order for the attractiveness and resultant uptake of renewable energy in mining operations to increase, power supply has to be cost effective and constant. ‘At the moment, renewables are not always able to meet these requirements. As techno-logy advances – and it does so at an ever-increasing rate – solutions will be found for renewables to replace fossil fuel power sources,’ he says.

    ‘The mining industry is receptive to progress in renewable energy but of course their decisions must balance the cost and reliability of these energy sources.’

    Lunsche agrees, adding that more competition in the market as far as renewable energy providers is concerned, along with higher carbon taxes and more regulation, would also serve the industry well. ‘We are extensive users of fossil fuels so if there’s a carbon tax on CO2 emissions that hits mining companies hard,’ he says.

    According to Naidoo-Vermaak, Harmony’s motivators include sustainability, economic and social responsibility aspects: ‘We have been looking for a sustainable value accretive rehabilitation solution, which has been met by renewable energy options such as biomass and solar parks.

    ‘Simultaneously, we have concluded that these initiatives will result in potential operational cost savings to the mines and plants, especially as they are designed to substitute more expensive sources of energy. With carbon tax possibly added to our energy bill in future, this becomes a financial imperative as well.’

    Dixon is of the opinion that the main motivation to move towards renewable power is to achieve the two degree drop in tempera-ture by reducing carbon emissions as agreed in Paris last year.

    ‘One of the most cost-effective ways of reducing carbon emissions is to reduce the power demand through more efficient use of electricity – an area in which mines can make a significant positive impact,’ he says.

    ‘They consume such enormous amounts of energy that even a small improvement will have a big impact on the community as a whole.’

    By Tony Muir
    Image: John Brown – SRK Consulting (Cape Town)