The mining sector is one of Africa’s largest, with much of the continent being richly endowed by mineral resources. However, the mining sector struggles in Africa compared to other regions in the world – partly because of economic and political uncertainty.
A key aspect to securing a long-term return in a mining operation in Africa, therefore, is creating a stable, well-run operation which will encourage investment and diversify economic spin-offs for local communities. Energy supply is a key aspect of this, and it is important that energy supply is both affordable, secure and sustainable.
Why is solar a relevant consideration for the African mining sector?
Continued pressure on cost minimisation in mining
The mining sector has taken a knock in recent years, particularly due to economic pressures from global markets. This has squeezed resources available for mining operations, increasing the pressure for efficient and slick operations. For energy-intensive mines (many mines spend up to 20% of their total input costs on energy), it is important that electricity supply is as cheap, and reliable, as possible.
Many mining operations in Africa are located remotely, with electricity only being provided by diesel gen-sets. Because diesel not only needs to be bought, but also transported to the site of the mine, this method of providing energy is extremely expensive and encompasses potential supply disruption risks – particularly in Africa, where road infrastructure is often unreliable.
Because of the falling costs of solar PV and batteries, microgrids are seen as a reliable solution for the electrification of Africa. Microgrids offer a reliable electrical connection where there is no grid available, and/or the existing grid cannot output the required power and voltage. Properly programmed microgrids provide continuous, reliable power by switching sources seamlessly when needed. Over and above this, one of the cheapest microgrids can be formed from solar PV, battery storage, and gas to supplement supply. These microgrids can even be financed by third parties, resulting in immediate savings for the mining operation with no initial capex outlay.
Increased focus on sustainability and environmental impact of mines
Global interest in sustainability has caused reflection in the mining sector, which, despite providing much of the world’s economic activity, often has negative social and environmental impacts. On top of this, recent international codes and reporting standards, such as the Global Reporting Initiative, encourage mining companies to become increasingly transparent about their social and environmental impacts – and report on the “triple bottom line”.
For mining companies, reporting on their environmental footprint will include their greenhouse gas emissions, or “carbon footprint”.
How companies report on their greenhouse gas emissions
Scope 1 emissions relate to a company’s direct combustion of fuel. In the case of a mining company, this would include any transport fuel used when transporting goods to and from the mine, as well as the diesel fuel burnt, if diesel generators are being used.
Scope 2 emissions relate to purchased electricity. In the case of a mine, any electricity that is generated by the national grid would be applicable here.
Scope 3 emissions relate to the supply chain emissions of the operation – whether incoming or outgoing. In the case of a mining operation, this would include emissions released in the processing, smelting or disposal of the mined products.
Depending on their commitment to transparency, sustainability reports could include reporting on scope one, two and three emissions. On top of this, shareholders expect a commitment to a reduction in the overall carbon footprint. Switching over to green energy is an important step for mining businesses to reduce both their scope 1 and 2 emissions.
Is solar for mines operationally reliable?
Avoiding operational risks is a key aspect of being successful in the mining industry, which is recognized as being traditionally quite conservative and risk-averse. Given that any downtime or disturbance to the operations of a mine can lead to very large financial losses, any risk associated with deploying new or untested technologies is not an option.
As such, historically, unfamiliarity with solar technology has made mine managers reluctant to implement solar solutions that could create significant cost savings. Yet increasingly the “proof of concept” for solar energy and the knowledge of successfully implemented systems is turning mining managers around to the benefits.
Solar is by now a mature technology that has been proven in several mining operational case studies around the world, and reliability of the systems can match and exceed what an existing diesel genset (or grid) offer. For example, a hybrid system in Western Australia has allowed the gold-copper mining operation to save 20% on diesel costs. Even a Russian precious metals mine is converting to solar energy, despite Russia’s low irradiance levels.
Also on the African continent, solar energy installations at mines are becoming more common, with an increasing number of solar systems being installed or considered at mines in Namibia, Botswana, Tanzania and Ghana. Such projects are often offered on a financed basis – for example, for a gold mine in Burkina Faso, signing a 15-year renewable energy Power Purchase Agreement (PPA) for 15 MW of solar power was the best option to save on operational costs.
SOLA has designed and constructed hybrid solar-battery-diesel systems that have a wide applicability in the mining sector. Should you be involved in mining operations or its financial management, we are keen to meet to discuss your requirements on-site and execute a thorough feasibility assessment, and create a system design tailored to the specific operational conditions of your mine. Feel to reach out to our team members dedicated to mining here. SOLA has also developed a solar mining tool to assist mines with creating a high-level assessment of the business case for solar at their operations. Click here to access the solar mining tool.