Energy management should be a priority as rising fuel prices and heightened renewable energy use in mining make electrification more appealing. Since overhauling power and monitoring infrastructure is so complex, business leaders and electric utility professionals are critical in this transformation.
The Complex Relationship Between Energy and Mining
Earthmoving, mineral extraction, processing and material transportation are resource-intensive. Mining operations accounted for approximately 1.7% of global power consumption in 2023. That figure could increase by a factor of two to eight by 2060 if current trends continue. While the sector’s usage is no industry secret, it has become less acceptable in recent years.
Mounting regulatory pressure and rising diesel costs prompt companies to revisit their traditional energy management strategies. Many are actively exploring integrating renewable energy in mining to alleviate operational and financial challenges from declining ore grades, volatile fuel prices and tightening emission regulations.
While some organizations can cut costs elsewhere, power consumption is typically one of the largest line items. Energy costs account for 15% to 40% of total operational expenses in the mining industry, underscoring the importance of effective energy management. Emissions are another consideration, as they can affect taxes and sustainability.
Green Mining Solutions Reshaping Energy Management
Integrating renewable energy in mining offsets companies’ reliance on heavy fuel oil plants and public grids. Solar, wind and geothermal sources can consistently produce free electricity in ideal conditions.
A hybrid system may be ideal for most mines because the dual power sources compensate for grid strain during peak load. Though it is not as environmentally conscious as relying solely on solar or wind, it could be a more practical solution.
While renewables are often fundamental to strategies addressing energy management in mining, companies do not necessarily need to rely on these. Instead, they can adopt modern technologies or use smart grids with built-in sensors to increase efficiency.
A machine learning algorithm can identify and separate metals and ores by type. Alternatively, in logistics, it can ensure optimal efficiency in material collection, processing and transportation. These models can detect hidden patterns and process vast datasets in seconds, making them ideal for uncovering process inefficiencies.
A maintenance schedule can help firms detect indicators of failure before it occurs, significantly reducing repair expenses and preventing equipment wear. A combination of sensors and artificial intelligence enables predictive maintenance, which enhances these benefits.
The Benefits of Enhanced Energy Management in Mining
Upon leveraging automation, monitoring technology or renewable energy in mining, companies can see improvements reflected in their energy efficiency and cycle times.
1. Cost Savings
Whether organizations leverage renewables or machine learning technology, they can see substantial returns. McKinsey & Company states electrification could slash energy costs by up to 70% and lower maintenance expenses for mobile machinery by approximately 30%.
Mines are typically vast open spaces in remote locations on owned land, ideal for on-site renewable electricity generation. Companies could deploy a microgrid to increase on-peak reliability, reducing their reliance on purpose-built HFO plants.
2. Operational Efficiency
The electrification trend has driven battery technology improvements. Today’s models are more efficient and have a larger capacity, enabling rapid, low-cost recharging and extended operation. Electric systems are generally more compact and easier to maintain than internal combustion engines and hydraulic systems, further improving output by preventing unplanned downtime.
Alternative energy management solutions can streamline operational efficiency, too. For instance, an advanced algorithm can lower stripping ratios by optimizing ore identification and overburden removal, shortening cycle times and reducing equipment wear.
3. Emissions Abatement
Green mining technologies make emissions abatement possible. For example, electrifying a mine with a microgrid supplied by solar and wind could almost eliminate a company’s carbon footprint. In addition to improving the mine’s environmental impact, this approach would reduce carbon taxes.
Challenges Facing Electric Utilities and Mining Companies
Electric utilities and mining professionals may face hurdles in balancing energy and mining efficiency.
1. Infrastructure Overhauls
Integrating renewable energy into mining requires on-site grid connections and substations on top of solar panels, wind turbines or geothermal system installation. Depending on the solution, organizations may have to invest in charging stations, hybrid machinery or battery storage. Historically, many have used HFO plants, which may complicate the transition.
2. Large Expenditures
Significant capital outlays are out of reach for some due to declining ore grades and rising prices. According to PwC, the mining sector generated $90 billion in net profits in 2023, down 44% from 2022. Electrifying at scale is costly, requiring extensive energy generation and storage infrastructure investments.
Private companies may be able to rely on public utilities. However, if the entire industry moves to electrify simultaneously, there might not be enough resources to meet demand. Private companies can generate power for free with solar, wind or geothermal, but upfront investment requirements would be substantial.
3. Technical Limitations
While mines can last decades or even centuries, ore deposits are finite. Relocating microgrids to a new site may pose hurdles. Green mining viability might differ. For instance, solar capacity may be lower.
Case Studies of Innovative Energy Management in Mining
Rio Tinto — the world’s largest iron ore miner — plans to invest an additional $600 million in renewable energy assets in the iron-ore-rich Pilbara region as part of its plan to halve its carbon emissions by 2030. This investment is part of a larger $7.5 billion strategy.
Representatives say the funds will construct a solar facility with a 100-megawatt capacity and a 200-megawatt hour on-grid battery storage system by 2026. In addition to abating approximately 300,000 tons of carbon dioxide, it will reduce gas costs by around $55 million annually at today’s prices.
Another example is B2Gold’s six-megawatt solar facility and battery storage system at the Otjikoto mine in Namibia. It provides around 13% of the mine’s power as of 2024. The company also installed solar at the Fekola mine in Mali, enabling it to stop using HFO during daylight hours. It is the first company this size to turn off thermal engines during the day.
At first, B2Gold prioritized reducing carbon emissions and becoming more sustainable. However, it is expanding its investments into green mining because hybrid power systems are becoming far cheaper than alternatives. Baseload renewables can be substantially less expensive than a full thermal fleet.
The Outlook of Renewable Energy Use in Mining
As renewable energy in mining becomes more prevalent, business leaders and electric utility professionals must overhaul investments and on-site infrastructure. Developing a strategic, efficient plan will take time and substantial capital expenditures, so optimization with advanced monitoring technologies is ideal.
