11 Recent Renewables in Mining Projects

1

FORTESCUE METALS GROUP

MINE: Christmas Creek and Cloudbreak iron ore mines at the Chichester Hub, Pilbara, Western Australia

RENEWABLE ENERGY: Solar-gas-battery hybrid

DATE: Construction is expected to commence before the end of the year and be completed by mid 2021.

Fortescue Metals Group will set up a solar gas hybrid project to supply up to 100 percent of the daytime energy required at its Christmas Creek and Cloudbreak mines at the Chichester Hub iron ore operation in the Pilbara, Western Australia.

In partnership with Alinta Energy, FMG will construct a 60-megawatt solar PV generation facility at the Chichester Hub. Alinta will also build by mid-2021 a 60-kilometer transmission line to link the Christmas Creek and Cloudbreak mines to Alinta’s existing 145 MW Newman gas-fired power station and its 35 MW Battery Storage System (BSS).

With up to 100%-day time energy provided by the solar facility, additional power, if needed, would be sourced from the gas station and BSS. The project will save 100 million liters of diesel annually, and reduce carbon emissions by 40 percent at Chichester.

According to Fortescue chief executive Elizabeth Gaines, the project will drive “long-term sustainable cost reductions to maintain Fortescue’s global cost leadership position.”

2

HARMONY GOLD

MINE: Three long-life mines in the Free State, South Africa

RENEWABLE ENERGY: Solar PV

DATE: Unspecified

Harmony Gold is closer to its goal of reducing electricity costs and improving power reliability at its gold mines in South Africa. The company will install 26MW of solar PV power at three gold mines located in the Free State province.

In a June presentation on electricity demand management, Harmony had identified solar photovoltaic (PV) installations as a future initiative to cut electricity costs. The company’s electricity portion of the cost (excluding capital) rose to 15% in FY2018 from 8% in FY2007.

Daniel Goldstuck, Head of Energy Storage and Microgrid Services at the SOLA Group, announced in early October an agreement with a consortium to install three solar PV plants at Harmony Gold’s mines in Free State, according to miningweekly.com. TheSOLA Group is a South African renewable energy company operating across Africa. When combined, the three solar installations would generate 26 MW.

3

B2GOLD CORP.

MINE: Fekola Gold Mine, Fekola, Mali, West Africa

RENEWABLE ENERGY: Hybrid solar/heavy fuel oil (HFO)

DATE: Scheduled for completion in August 2020

B2Gold, the world’s new senior gold producer, will set up one of the largest off-grid hybrid solar/heavy fuel oil (HFO) plants in the world at its Fekola gold mine in Mali, West Africa.

Studies of the project have indicated solid viability at 30MW solar generating capacity with significant battery storage included. It will entail a capital cost of about $38 million and is likely to be completed in August 2020.

The solar facility will reduce operating costs by 7%, given that three HFO generators would be shut down during daylight hours, saving about 13.1 million liters of HFO annually. The project has a payback of four years.

If successfully implemented, the Fekola project would be the second feather in B2Gold’s solar cap.

It would follow on its 24MW solar/HFO hybrid plant at the Otjikoto gold mine in Namibia. Opened in 2018 and one of the first of its kind in the world, the plant duly achieved the targeted generation and savings in HFO consumption.

4

GOLD FIELDS LIMITED

MINE: Agnew Gold Mine, Agnew, Western Australia

RENEWABLE ENERGY: Wind, solar, battery, and gas microgrid

DATE: Stage 1 is operational. Stage 2 to complete in 2020

The Gold Fields owned Agnew gold mine will be the first Australian mine to be powered by a wind, solar, battery, and gas microgrid. It is Australia’s largest hybrid renewable energy microgrid and the first to utilize wind generation at a mine site.

The microgrid comprises an 18 MW wind farm of five wind turbines, a 10,000 panel 4 MW solar farm, and a 13 MW / 4 MWh Battery Energy Storage System (BESS). A 16 MW gas-engined power station would ensure the security and reliability of the microgrid’s power supply. Renewable power from the microgrid will provide for 60% of the Agnew mine’s energy requirement.

Monitoring instrumentation using state-of-theart forecasting technology will detect potential weather changes such as looming cloud cover and schedule the activation of gas generators to augment supply as solar generation tapers down. The Project will be owned and operated by EDL, a leading global producer of sustainable distributed energy, under a 10-year, 2-stage agreement with Gold Fields.

Stage 1 is an off-grid 23MW power station incorporating 16MW gas and 3MW diesel generation and 4MW photovoltaic solar. This stage,including the solar farm, is already operational.

Stage 2 is the 18 MW wind farm, a 13MW/4MWh battery energy storage system, and an advanced microgrid control system. Supported by the Australian Renewable Energy AgencyARENA, this stage will complete in 2020.

5

RESOLUTE MINING LIMITED

MINE: Syama Gold Mine, Mali, West Africa

RENEWABLE ENERGY: Solar-battery heavy fuel oil (HFO) hybrid

DATE: Expected to be fully operational by end-2020

Resolute Mining’s Syama Gold Mine in Mali, West Africa, will have some impressive credits.

Syama will be the world’s first purpose-built, fully automated underground gold mine. Also, a 40 MW, off-grid, fully integrated, solar hybrid plant – the largest in the world for a stand-alone mining application – will power the mine.

The hybrid power plant will combine solar, battery, and heavy fuel oil (HFO) technologies. It will be a sea change from the current 28 MW diesel generation system that was installed by BHP in the 1980s and costs from $0.20 to $0.24 kWh.

Contemporary HFO generating sets are efficient enough to give a 50% cost advantage compared to diesel. Combined with clean and low-cost solar PV and a balancing reserve from electric batteries, the proposed hybrid solution is the lowest cost option for Resolute.

“The solution allows us to draw power from three off-grid solutions,” says Project director, John Wheeler. “This will generate savings of up to 40% on the current operating costs of power.”

Resolute has inked an independent power producer (IPP) agreement with Ignite Energy for the financing, construction, and operation of the new power solution.

Ignite will guarantee power supply over 12 – 20 years, with a tariff that may have a maximum cap. However, the PPA is under finalization.

6

NORDGOLD SE

MINE: Bissa and Bouly Gold Mines, Burkina Faso, West Africa

RENEWABLE ENERGY: Solar PV

DATE: Scheduled completion Q4, 2020

Nordgold is building a 13 MW solar photovoltaic power plant in Burkina Faso, the location of its key Bissa and Bouly gold mines.

The new power station will provide 100% renewable energy to the two gold mines.

Total Eren and AEMP will develop, finance, construct, and operate the solar PV plant, which will be complemented by a battery energy storage system. Construction of the plant will commence soon, with completion scheduled in the fourth quarter of 2020.

The new renewable energy plant will enable Nordgold to save fuel consumption of about 6.4 million liters and reduce carbon emissions by 18,000 tonnes annually.

“By building this new solar power plant, not only will we improve the efficiency of our mines by creating a more secure power supply at lower cost, but we are also helping to make our Burkina Faso mines far more sustainable while minimizing our carbon footprint,” said Nikolai Zelenski, Chief Executive Officer of Nordgold.

7

LUBELSKI WĘGIEL BOGDANKA S.A.

MINE: Bogdanka Coal Mine, Near Lublin, Lesser Poland

RENEWABLE ENERGY: Solar PV

DATE: Unspecified

APolish coal mine is turning to solar PV power for its operations. Polish energy group Enea SA will build a 30 MW solar plant for the Bogdanka coal mine in the southeastern province of Lesser Poland.

Lubelski Węgiel Bogdanka S.A., the company which owns the coal mine, is a subsidiary of Enea.

Located on 55 hectares of land, the solar PV plant will generate about 30,000 MWh annually. Enea will supply the energy to the Bogdanka coal mine under a long-term power purchase agreement.

According to the mine-owner, the solar PV farm will help reduce the mine’s fixed costs and improve its competitiveness.

Due to its dependence on coal, Poland is the pollution capital of Europe. But in June this year, the rising cost of coal-fired energy forced the Polish government to freeze electricity tariffs for households, hospitals, and small businesses for 2019.

Analysis by the Polish clean energy group the Instytut Energetyki Odnawialnej (IEO) shows that power tariffs from a coal-plus-nuclear power system would rise 30% by 2030, and 60% by 2050. Strikingly, price hikes from a renewables system would be a maximum of 1.5 – 2%.

8

OZ MINERALS LIMITED

MINE: West Musgrave Copper-Nickel Project, Musgrave Province, Western Australia

RENEWABLE ENERGY: Solar-wind-diesel hybrid

DATE: Unspecified

Oz Minerals, the Australian mining giant, is harnessing wind and solar power for its West Musgrave mine to reduce the high costs from fossil fuels.

West Musgrave is the largest unexplored nickel-copper deposit in Australia. Power accounts for 40% of the mine’s processing costs.

“Large-scale solar photovoltaic and wind solutions are currently economically viable and technically mature solutions to reduce the project’s reliance on high-cost fossil fuels for electricity generation,” the company said, adding that a high-quality, consistent solar and wind resource was available at the mine.

Oz will satisfy the 55MW energy requirement of the mine through a mix of solar, wind, and diesel power. About 70 to 80% of this will be from renewable sources, while diesel and battery storage will make up the balance.

Oz Minerals CEO Andrew Cole highlighted a hybrid power solution as one of the opportunities that would reduce the company’s carbon footprint, cut its power costs, and improve overall project economics.

9

ANGLO AMERICAN PLC

MINE: Los Bronces Copper Mine, El Soldado Copper Mine, Chagres copper smelter (all located in Chile)

RENEWABLE ENERGY: Unspecified

DATE: Power Supply Agreement takes effect in 2021

Mining major Anglo American will buy renewable energy of up to three terawatt-hours per year from Enel Generación Chile, a subsidiary of energy group Enel.

Effective 2021, Enel will power Anglo’s Los Bronces and El Soldado copper mines, as well as the Chagres smelter, for ten years.

Enel will use only renewable sources for this energy. The agreement, described as one of the most comprehensive renewable energy contracts in Chile to date, will enable Anglo to cut its emissions by 70%, about the same as from 270,000 cars.

Anglo intends to rely entirely on renewable energy from 2021 and onwards.

10

BHP

MINE: Escondida and Spence Copper Mines, Chile

RENEWABLE ENERGY: Mix of solar, wind, hydro

DATE: Commencement - (Enel) August 2021, and (Colbun) January 2022

BHP, the biggest mining company in the world, will use only renewable energy for its copper mines in Chile starting in the mid-2020s. BHP entered separate renewable energy contracts for its giant Escondida and Spence mines. It signed 15-year contracts for 3 Terawatt hours per year (TWh/year) with ENEL Generación Chile and 10-year contracts for 3TWh/year with Colbún, according to CNBC. BHP also canceled its outstanding coal contracts at the cost of US$780 million. BHP said it gains many advantages from the shift to 100% renewable energy. These include displacing CO2 emissions, flexibility in its power portfolio, energy security, and a reduction in costs. “From a commercial perspective, these contracts will deliver an estimated 20 percent reduction in energy prices at Escondida and Spence operations,” BHP said in a statement.

Interestingly, BHP said the new contracts would be “value accretive” even after considering the provision of US$780 million for canceling existing coal contracts.

The new energy arrangement will displace 3 million tonnes of CO2 per year from 2022 compared to the existing fossil fuels. Last week, more than one in five of BHP shareholderssupported exiting groups ‘inconsistent’ with Paris climate goals.

11

ELEMENT 25 LIMITED

MINE: Butcherbird Manganese Deposit, Pilbara, Western Australia

RENEWABLE ENERGY: Wind and solar mix

DATE: Unspecified

The Butcherbird Manganese Deposit is Australia’s largest onshore manganese resource with over 260 Mt of manganese ore. Fully owned by Element 25, it is located 100 km south of Mt Newman in the Pilbara region of Western Australia.

The project vision: To produce Electrolytic Manganese Metal (EMM) and Manganese Sulphate, both of which are “high-purity, high-value” manganese products, using a simpler, cleaner proprietary process method. Also, to do this using up to 90% renewable energy.

The use of renewable energy to that extent may bring the electricity cost down to around 7c/kWh, a level competitive with Chinese producers of the metal. Butcherbird will need approximately 100MW of energy to run both its operations and the energy-intensive electrolysis needed to convert the ore into metal.

According to Element 25, executive director Justin Brown: “Renewable energy-powered electro-winning of metals embeds the renewable energy into the products for export.” Therefore, apart from cost savings, this will also add value. That’s because a growing number of export customers are scouting for low-carbon supplies.

The company is consulting with Murdoch University and Advisian to maximize the penetration of various forms of renewable energy into the project’s energy model.

Element 25 will soon tender for the power solution, as well as a long-term power purchase agreement.