South Africa’s mining companies face major financial losses due to on-going wage negotiations. These challenges, coupled with rising administered costs and fluctuating commodity prices, highlight the need for the industry to look at how best it can increase profits to ensure a sustainable future. To cut back on costs the industry should look to renewable energy options, such as photovoltaic (PV) solar energy, as an alternative to power mining sites. In the long run significant costs can be cut by not relying on fossil fuel power solutions, such as diesel-fired generators.

At a renewable energy and mining conference that took place in Toronto recently, it was discussed that mining houses typically spend about 30% of the operating cost of a mine on energy, operating a typical diesel-powered generation set would cost about US$0.28/kWh to US$0.32/kWh, compared with the current average operating cost of solar power being at about US$0.17/kWh.

The mining process, which consumes a profuse amount of electricity, involves the hauling, grinding and processing of minerals to supply both the energy and raw material needs of the modern world. Using less electricity by the use of modern energy efficient concepts such as PV solar energy, means that every kilowatt hour saved goes straight to the bottom line.

With the rising costs of traditional energies and the waning costs of renewable energies, renewables are increasingly more resourceful. It is evident, however, that South Africa’s mining sector, a major user of electricity, can be more efficient in terms of energy consumption by including emerging renewable energy strategies, and automated renewable energy technologies such as PV solar modules, into their business models.

In doing so they will promote continuous improvement in energy usage, security of energy supply and long-lasting contributions to the environment, thus covering the increasing energy demand in an proficient and profitable way without increasing carbon emissions.

According to a Pike Research report which was released last year, it was predicted that the global mining industry would invest US$20 billion in renewable energy by 2020. Large megawatt-scale PV power plants are already providing mining companies with reliable, steady and emission free electricity during the day, that is decoupled from inflation, to reduce electricity consumption used for underground mine refrigeration, ventilation, grinding and more.

One of the world’s biggest gold miners, Barrick Gold, has two demonstration sites for solar power. These included 1.0 MW of installed power in Reno, Nevada, where the company had been in discussions with solar developers interested in using the legacy mine site to develop a solar farm. The company also has a small test solar farm in Chile.

In South Africa the Cronimet’s chrome mine in Limpopo has integrated a 1.0 MW off-grid solar PV facility into the electricity supply system in an effort to reduce its reliance on diesel generators. The plant will produce 1.8 GWh and is expected to displace 450,000 l/y of diesel.

With many mines being situated in remote locations in the country which have to source their electricity from diesel generation, it makes good business sense for them to make use of PV solar energy supply, especially as the country has abundant solar energy supplies, to  reduce risk and costs of diesel fuel transport to remote operations.

By Arthur Chien, CEO of Talesun Energy