HomeEnergyIs renewable energy mining’s new normal?

Is renewable energy mining’s new normal?

Operating in a COVID-19 world is not the only new normal adjustment the mining industry has been making over the last year.

Adopting renewable energy as a hybrid or even primary energy source is rapidly becoming a widely accepted solution for the African mining sector and one that is fast emerging as another new normal. And there are numerous projects in implementation phase to prove this. Written by LAURA CORNISH, GERARD PETER & CHANTELLE KOTZE.

THIS ARTICLE FIRST APPEARED IN MINING REVIEW AFRICA ISSUE 2, 2021
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Incorporating alternative, renewable energy sources into a mining operation was not until fairly recently a viable option. The cost to build a solar-powered plant was exorbitant and reliability of supply deemed a significant concern.

But the energy space has evolved quickly – renewable energy technologies have become globally accepted and the increase in demand has made prices affordable. Investors’ intensifying demand for sustainable operations that are compliant with ESG principles has also seen the mining industry consider clean energy as a mechanism to achieve this.

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South Africa in particular has also made significant strides in this space with government permitting the industry to secure and generate its own energy.

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The result – a rapid emergence of new renewable energy projects in various phases of implementation across the African mining sector – and here are those projects sitting at the forefront of new energy innovation:

B2Gold’s Fekola mine in Mali

Since B2Gold first acquired the Fekola gold mine, located in a remote corner of southwest Mali, exploration studies have revealed the deposits to be almost double the initial estimates.

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A recent site expansion has just been completed, and while the existing power units provide enough power to support the increase in production, the company has sought to reduce its energy costs, cut greenhouse gas emissions, and increase power reliability.

The addition of a 35 MWp solar photovoltaic (PV) plant and 17 MW of energy storage to the existing 64 MW thermal engine plant was decided. This new energy mix is anticipated to save over 13 million litres of heavy fuel oil (HFO), reduce carbon emissions by an estimated 39 000 tpa and generate a payback in just over four years.

Wärtsilä’s GEMS, an advanced energy management system, has been set up to control the energy across the fleet of power sources, thermal, renewable, and battery storage.

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The integration, control, and optimisation capabilities provided by GEMS allow the thermal units to be run at the most efficient rate and enable the battery storage to handle the large load step changes and volatility of the solar PV generation assets.

In the context of the Fekola mine, which is an off-grid electrical island, the battery is performing a lot of different services simultaneously; including frequency response, voltage support, shifting solar energy, and providing spinning reserves.

The energy load is very flat, with a steady consumption rate of around 40 MW as the mining equipment is operating consistently, 24/7.

However, if an engine trips offline and fails, the battery serves as an emergency backstop. The controls reserve enough battery energy capacity to fill the power gap for the time it takes to get another engine started, and the software inside each inverter enables the battery to respond instantaneously to any frequency deviation.

Following the temporary suspension of solar plant construction activities in April 2020 due to COVID-19 restrictions, construction recommenced in October.

At the end of December overall construction progress was approximately 70% complete but a fire in early January (currently under investigation) in the solar storage yard destroyed approximately 25% of the solar panels for the project.

B2Gold expects that 25% of the solar capacity will become available in the first quarter of 2021, 50% in the second quarter, and the remaining 25% by the third quarter.

The solar plant is therefore not a necessary component to sustain the higher process plant production rate but is expected to reduce Fekola’s operating costs and emissions by decreasing power plant fuel consumption and maintenance costs.

The Fekola mine project incorporates the largest off-grid hybrid power solution in the world, demonstrating the growing case for clean energy and its sustainable and economic potential for mines in Africa and beyond.

Resolute Mining’s Syama mine in Mali

Mali is a hot spot for renewable energy in the mining sector. Gold miner Resolute Mining is another company investing in a cleaner energy footprint for its automated underground Syama operation.

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Interim CEO Stuart Gale notes Syama’s energy strategy will occur in two separate phases – the first being to replace a series of diesel-powered generators with three 10 MW heavy fuel oil (HFO) power generators.

“They are efficient, offer reasonable cost savings and importantly will lower our carbon emissions,” he says.

Once fully operational, this new power station is expected to generate long-term electricity cost savings of up to 40% and reduce carbon emissions by approximately 20%.

Unfortunately, due to COVID-19, the completion of the HFO plant was not completed at the end of 2020 but Gale is confident its revised March 2021 completion date is realistic and on track.

The new plant will also have a 10 MW battery storage system, designed to provide spinning reserve displacement and outbalance sudden jumps in load.

What is truly exciting for Syama is the potential second phase of its energy journey, which includes the installation of an additional 10 MW HFO generator in 2022 and 20 MW of solar PV power in 2023, to be housed on the surface of the current tailings storage facility (which will be closed to accommodate this new infrastructure) – an intelligent use of space.

Once the solar power system is installed, the 10 MW battery storage system will also manage the output of the solar power system, smoothing out fluctuations in PV generation and facilitating integration into the hybrid system.

Resolute Mining has also signed a power supply agreement (PSA) with globally leading power generation provider Aggreko for the hybrid plant.

The terms of the PSA provide that Resolute will pay a levelised cost of energy tariff of US$0.15/kWh based on current heavy fuel oil prices. This cost compares favourably with the current energy cost at Syama which ranges from $0.23/kWh to $0.26/kWh based on prevailing diesel prices.

The PSA also includes an incentive programme whereby Aggreko may share 25% to 50% of the resulting fuel savings for Resolute if improved efficiencies for key performance indicators are achieved.

This provides an incentive to further reduce the cost of power for Resolute. The new power plant will be funded and operated by Aggreko with limited capital contribution required by Resolute.

“This is an incredible initiative for Syama and further drives this mine into an era that embraces technology and ESG principles,” Gale highlights.

Pan African Resources’ Evander Mines in South Africa

South Africa’s mining sector, albeit more mature than those of most other African countries, is no stranger to energy supply constraints.

This has led several mining companies to investigate the option of supplementing their grid-supplied energy with renewable energy solutions to ensure a reliable energy supply when there are unscheduled power disruptions experienced from the national grid.

Mid-tier gold producer Pan African Resources felt it prudent to investigate renewable energy solutions, not only for the anticipated long-term cost savings owing to the above-average inflation increases proposed by State-owned power utility Eskom over the coming years but also to reduce the company’s carbon footprint.

The company investigated the feasibility of various renewable energy power options for its flagship Elikhulu tailings retreatment plant at Evander Mines.

Elikhulu is one of the world’s largest tailings retreatment facilities and processes 1.2 Mt of historic tailings per month from the three existing slimes dams at Evander.

A solar PV plant solution was found to be the only feasible solution on a site specific, safety and economic basis as it would reduce the company’s production costs, improve its sustainability, and benefit returns to shareholders over the longer term.

Pan African Resources has engaged juwi South Africa for the construction of the proposed 10 MW solar plant, which will provide up to 30% of Elikhulu’s annual power requirements and savings of some 26 000 t of CO2 per year, which is between 3% and 5% of the group’s total annual emissions.

There are plans to increase the size of the solar plant to an estimated 25 MW to allow clean energy feed to the adjacent Egoli project at Evander Mines, which will be South Africa’s newest underground gold mine with a life of mine of 14 years.

Egoli will commence production in three years’ time, and the cost benefits of using solar energy as well as the required capacity will be incorporated into the feasibility study updates to the project.

Further reductions in the group’s emissions will result from the proposed expansion of the plant as well as from similar plants planned at the company’s Barberton Mines operations.

According to Pan African Resources CEO Cobus Loots, the solar plant, which has an expected life of 20 years, will generate electricity at much lower costs (depreciated cost over 20 years estimated at R0.83/kWh) than could be provided by Eskom (with a tariff of R1.03/kWh), and makes this investment compelling from an economic point of view.

“We welcome any initiatives by the government that will enhance our ability to operate and improve our sustainability, without the requirements for a lengthy application and approval process by the Department of Mineral Resources and Energy and associated entities,” says Loots.

The company expects to generate first power in the third quarter of 2021.

Bushveld Minerals’ Vametco mine in South Africa

AIM-listed integrated vanadium producer Bushveld Minerals’ energy subsidiary, Bushveld Energy, is under way with plans to demonstrate the technical and commercial capability of hybrid mini-grids using solar PV and vanadium redox flow battery (VRFB) technology for energy storage.

In doing so, the company will, through the minigrid project, also provide renewable energy to its Vametco mine in South Africa, reducing its reliance on power consumption from the national grid.

For the hybrid mini-grid project, Enerox will supply the 1 MW/4 MWh VRFB; and Abengoa will manage the engineering, procurement and construction of the project, including the integration of 3.5 MW of solar PV.

Bushveld Minerals signed a memorandum of understanding with Thebe Investment Corporation, involving it as a strategic equity partner in the development and funding of the project, which is currently under way.

Despite COVID-19, the engineering phase for the project commenced in 2020 and has been completed. Once the debt and equity financing closes, the company can apply for a generation licence with the National Energy Regulator of South Africa and proceed to construction, which is expected to take place later this year.

This hybrid mini-grid project, which will supply just under 10% of Vametco’s energy consumption and help reduce carbon dioxide emissions by more than 5 700 t/y at the site, is the precursor to its plan of supplying a larger amount of energy to Vametco in future, says Bushveld Energy CEO Mikhail Nikomarov.

He notes that plans are also under way to progress self-generation options for all of Bushveld’s existing and future electrical energy needs within its facilities.

“We have identified energy needs of more than 125 MW of solar PV and 180 MWh of battery energy storage within our facilities,” adds Bushveld Minerals CEO Fortune Mojapelo.

This plan has been in development for a number of years now in response to Eskom not granting capacity increases due to lack of capacity to fulfil this.

Therefore, as a means to mitigate risk and to prepare for the fact that the company will need more and more energy as it expands its projects and production in South Africa, Bushveld has developed a self-generation energy strategy, leveraging its energy business, to enable the business to progress with its growth and expansion plans.

With increasing pressure on the mining industry to decarbonise, Nikomarov highlights a trend that has emerged over the past 12-18 months in which mining companies are not only considering mini-grids from a purely financial sense as a means to decrease their electricity costs by displacing the high cost of diesel of HFO generation. Instead, companies are considering how much of their carbon footprint renewable energy mini-grids can displace.

“Shareholders and investors are increasingly considering the environmental and sustainability benefits of renewable energy,” says Mojapelo, noting that companies can be penalised for not meeting emission standards.

Moreover, companies that can prove that they are decarbonising beyond the minimum requirements may stand to benefit in future from be in a position to apply for the various regulatory approvals and licences.

The solar project also ties in with the company’s aim to lead the global mining industry in fuel-cell mining haul truck adoption, by ultimately using renewable energy sources to produce green hydrogen.

The development of a fuel cell truck is currently underway, and the first motion at Mogalakwena is expected before the end of the year.

In response to the global challenge of climate change, Anglo American Platinum’s activities are focused on radically reducing its energy consumption through its FutureSmart Mining methods and technology adoption, as well as switching to low-carbon energy sources and increasing renewables in its energy mix.

Aligned with this approach, the company has set 2030 targets to improve energy efficiency and reduce absolute greenhouse gas emissions by 30%, against a 2016 baseline. It aims to achieve carbon neutrality by 2040.

Gold Fields’ South Deep in South Africa

Another company that is well on its way of harnessing the power of the sun to improve energy efficiency is Gold Fields.

In February, the National Energy Regulator of South Africa (NERSA) approved the licence for the construction of a 40 MW solar power plant at its South Deep mine.

The solar PV plant will be constructed on the same site as the South Deep mine and all power generated by the plant will be consumed by the mine.

The solar plant has the potential to provide around 20% of South Deep’s average electricity consumption.

Nick Holland, Gold Fields’ CEO states, “The solar power plant will increase the reliability and affordability of power supply to South Deep, ultimately enhancing the long-term sustainability of the mine.

“The approval of this licence sends a strong, positive message to mining companies and their investors, potentially leading to decisions being taken to sustain and grow mining operations in the country, especially in deep-level, underground, marginal mines.

Enabling companies to generate their own power also gives Eskom room to address operational issues at its power plants.”

Gold Fields’ energy objectives are based on four pillars – energy must be reliable, available, cost-effective and clean – which promote a shift to self-generation using renewable energy sources.

“We are fully committed to making our contribution towards net zero emissions,” states Holland.

During 2020, Gold Fields successfully implemented solar and wind power plants, backed by battery storage, at two of its Australian mines, Agnew and Granny Smith. It also committed to renewables at its other Australian mines, Gruyere and St Ives, as well as the Salares Norte project in Chile when it starts operations in 2023.

All its other mines are also reviewing renewable energy options.

Since full commissioning of the Agnew microgrid, renewable electricity averages over 55% of total supply at the mine. During 2020, renewable electricity averaged 8% for the Australia region and 3% of total group electricity.

Once the South Deep project is commissioned, renewable energy’s contribution to the group total will rise to approximately 11%.

“We expect our investment in renewable and low-carbon energy sources to contribute significantly to our carbon emission reductions over the next few years.

“Power from the South Deep solar plant will partially replace coal-fired electricity from Eskom, enabling us to significantly reduce our Scope 2 carbon emissions,” Holland concludes.

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