192 (19.04.18)



Off-Grid in the Arctic, Mines Turn
to Renewable Energy

The mining industry has been slow to adopt green power, but as wind and solar projects get ever-cheaper, companies are able to drop their energy costs “to near zero”

On the northern tip of Quebec, engineers at the Raglan nickel mine are getting ready to put up one of the world's toughest wind turbines.
   They are looking at a narrow window. 1,800km north of Montreal, Raglan is continually blasted by wind. But it is too cold to use concrete, too windy to use cranes and too isolated for an electric grid connection. Summer is one month long. Even then, it frequently snows.
   “It is very tight,” laments Jean-Francois Verret, who is overseeing construction. “I must admit, when you arrive at Raglan for the first time, you have the impression of being on the moon.”
   Raglan is a microcosm for the wider mining industry, which has long flirted with using renewables, without landing a proper kiss. Originally built by Canadian nickel giant Falconbridge, it was one of the company's biggest moneymakers and is now owned by Swiss trading giant Glencore, which has more than doubled tonnage, expanding into four underground mines, using icebreakers to pump-out nickel, copper and cobalt, used for stainless steel and electric batteries.
   Buried by snow and darkness for much of the year (and 400km from the nearest tree) the mine is a self-contained pod, with its own power plant, water works and an airport. Other turbines have gone up this far north. At Rio Tinto's Diavik diamond mine, which is fractionally nearer the North Pole, four turbines account for 11 per cent of the mine's total power. But in sub-Arctic snowstorms, turbines frequently fail.
   Raglan's first turbine went up three years ago, costing C$22m ($19m). It has run smoothly, turning 97 per cent of the time, replacing 5 per cent of the mine's diesel, equivalent to taking 1,350 vehicles off the road each year. Having experimented with different storage techniques, including a flywheel to filter out freak gusts of wind, Glencore now wants to use wind to generate up to 20 per cent of the mine's energy, lowering costs, whilst cutting the mine's reliance on diesel.
   From Ireland to Argentina, wind turbines have become a ubiquitous feature of the mining landscape, whilst solar parks are popping-up alongside mines in Australia, Africa and Chile. But renewables only account for an estimated 2.5 per cent of the industry's total power and are still typically used in tandem with generators, as companies try to minimise upfront costs.

   That may be about to change, as renewables get ever-cheaper, and as companies come under pressure to lower emissions to get in line with the Paris climate agreement of 2015.
   Toronto-based Iamgold, which has spent $34m building solar parks at two of its mines in Suriname and Burkina Faso, says they have brought down its fuel costs to 17 cents per kilowatt hour, versus 21 cents for diesel. At larger operations, those gains are greatly amplified, says accountancy Deloitte, letting companies drop their energy costs “to near-zero.” Installation prices are meanwhile plunging, halving every ten years, according to the International Renewable Energy Agency.
   Companies that adopt a wait-and-see approach may be taking the greater risk, leaving themselves exposed to power outages and rising global electricity prices, which have stubbornly kept pace with copper over the last 20 years.
   Mining giant BHP, which generates only 2 per cent of its energy from renewables, lost $100m of production at its Olympic Dam mine in Australia two years ago, after a storm knocked out the grid.
   South Africa's mining industry has also been slow to invest in renewables, instead guzzling diesel and 14 per cent of all power produced by state-owned energy giant Eskom. In a country that suffers from blackouts, and with over 300 days of sunshine each year, that represents a missed opportunity, says a Washington-based think-tank.
   9 per cent of Glencore's power across its operations currently comes from renewables, in line with the global average. At Rio Tinto, that figure is a thumping 36 per cent, largely thanks to hydropower in its vast aluminium business.
   Some mines, including Antofagasta's Los Pelambres copper mine in Chile, are meanwhile getting close to the 100 per cent threshold. By going off-grid completely, companies can begin to look at new deposits, says Neal Brewster, a former economist for Rio Tinto, unlocking orebodies once seen as too remote.
   But the future is not here yet. At Raglan, engineers can only put up turbines if the wind drops for long enough to use a crane. “We operate in the sky with a 50-tonne crane,” says Jean-Francois Verret, “so precision is very important. We cannot proceed if there is some wind. It’s a little bit paradoxical.”



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