- Companies and countries globally are gravitating towards powering their mining operations from renewables, especially solar PV and wind power, according to a report by Fitch Solutions Macro Research
- In the times to come, mining companies will rely majorly on solar and wind, especially in Americas
- Falling costs of renewables and the attractive proposition to bring down their electricity bills will act as the major incentive for this shift
- Pressure to improve their environmental, social and governance (ESG) standards will also encourage companies to go in for renewables
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Declining costs of PV and wind power technologies is going to be of help to the energy intensive industry of mining that is expected to rely majorly on these two renewable sources of energy in the times to come. In a report published by Fitch Solutions Macro Research, a sister company to Fitch Ratings, it says countries and companies operating in the Americas are best positioned to lead the way in adoption of renewables in mining, supported by carbon pricing measures
Some of these are already using renewables in their key operations. Chile leads the race with 9 different mining companies having adopted wind or solar in their operations – that’s the highest number for any country to date, according to the report. Chile based Antofagasta Minerals is the global leader with the highest installed PV capacity of 191.56 MW for its mining operations. Another Chilean firm CAP uses 101 MW of PV in its operations, followed by one more Chile based mining company Collahuasi having 25 MW of installed PV capacity.
Power outages and high electricity prices are the other reasons for pushing mining companies to look for solutions outside the traditional fossil-fuel powered grid. Having a source of energy that generates power on its own helps them rely less on the grid and save electricity costs, the report points out.
Government regulations and a push for companies to opt for renewables with offers of subsidies will continue to work in favour of renewables in the mining segment. The report shows the case study of the world’s single largest coal producer, state-owned Coal India Limited (CIL) that is working out plans to develop 20 GW of solar power capacity over the next 10 years. In fact, in its Coal Vision 2030, CIL cast serious doubts over coal’s future that’s threatened by the growth of solar PV and storage industries (see PV and Storage Threatening Coal’s Future In India). On the other hand, rising pollution levels will work in favour of renewables for mining operations in countries like China.
While price consideration will be a key reason for mining companies to opt for renewables, they are also under pressure to improve their environmental, social and governance (ESG) standards. In March 2018, gold mining company in Burkina Faso, IAMGOLD Corporation got a 15 MW solar PV plant running for its gold mine and added to the existing 55 MW heavy fuel oil power plant (see 15 MW Solar Hybrid Plant In Burkina Faso).
“We believe mining companies will intensify their investments into renewable energy, battery storage, energy efficiency and carbon capture and storage (CCS) in order to improve their social license to operate over the coming years,” says Fitch Solutions. However, while the potential is huge, the current use of solar and wind is negligible in mining operations.