Our Senior Mining Analyst, Alex Sutton, discusses the turn towards renewable energy as a way of powering Australian mines.
As mining is an energy hungry business, industry leaders are beginning to turn towards renewable energy as a way of powering Australian mines.
Currently, most Australian mines are in remote locations. In particular, Western Australian mines are geographically isolated. This means that the mines are off the power grid and require diesel-powered generators in order to conduct day to day operations.
This means heavy carbon emissions just from powering the site alone and not just the emissions that are produced from running the heavy machinery such as giant haul trucks and 1500 tonne excavators.
Remote mines employ a lot of people and the diesel used to power the mining camps and other associated infrastructure emits a lot of carbon but it is uncertain how much at this stage. However, the mining sector does account for around 10% of Australia energy usage.
Many of the larger mining companies are starting to employ renewable energy at their mines in order to reduce their carbon footprints. The positive aspect of being so remote means that constructing solar and wind farms could gain government approval quite easily and be in place in reasonably short timeframes.
The Agnew Gold Mine, owned by Gold Fields Ltd (JSE:GFI), is home to the Australian mining sector’s largest renewable microgrid and is the first mine to be powered by wind-generated electricity, where renewables provide approximately 50-60% of the mine's electricity needs. More importantly, it saves 40,000 tonnes of carbon dioxide emissions every year.
Furthermore, at the Company’s Granny Smith gold mine, over 20,000 solar panels help power the mine and have reduced carbon emissions by 10,000 tonnes of carbon dioxide per year. Since 2016, Gold Fields has reduced its carbon footprint by approximately 10% globally and has future plans to build a 12 megawatt solar plant at Gruyere near Laverton in Western Australia, with further plans to build a 50 megawatt plant in South Africa.
Another company that has recently thrown its mining hat into the renewable energy ring is Northern Star Resources (ASX:NST), with its purchase of Newmonts Power Business, which is aimed at being used to meet the Company’s commitments of becoming carbon neutral. The purchase included the gas-fired Parkeston Power Plant, which is used to power the main regional centre of the Western Australian Goldfields, Kalgoorlie.
Larger mining companies such as Rio Tinto (ASX:RIO) and BHP (ASX:BHP), as well as Australian oil producer Woodside Petroleum (ASX:WPL), have all unveiled plans to spend money on wind turbines and solar panels as they seek to go green.
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