Energy and Mines Issue 7

FEBRUARY 2019 - ISSUE 7

INDUSTRY STRIVES TOWARDS 100% RENEWABLES: ENERGY AND MINES WORLD CONGRESS ROUND UP

POWERING THE WORLD’S FIRST FULLY AUTOMATED UNDERGROUND MINE: NEW RENEWABLE IN MINING PROJECT

Syama Gold Mine (courtesy Resolute Mining)

2

POWERING UNDERGROUND MINE

POWERING THE WORLD’S FIRST FULLY-AUTOMATED

UNDERGR OUND MINE B y K a t e D o u g h e r t y, E n e r g y a n d M i n e s When the sublevel cave at Resolute Mining’s Syama Gold Mine becomes the world’s first fully-autonomous underground mine in 2019, it will leverage automated drilling, automated loading, and automated haulage. In what will be an industry first, ore from this south Mali mine will originate underground and arrive at a single pad on the surface without being manually handled.

3

“I’m personally convinced that underground mining is going both automated and it’s going electric,” John Welborn, Managing Director and CEO, Resolute Mining

4

POWERING UNDERGROUND MINE

For nearly 30 years, this West African mine has been powered by a historic, diesel-fired power station that was incrementally expanded.

It currently has 28 MW of generating capacity consisting of two reconditioned 5 MW units and a series of 2 MW units. But exploring automation technology led to rethinking the mine’s power generation as well. In 2020, Syama will be powered by the largest ever off-grid hybrid power facility—a 40 MW hybrid solar, battery, and heavy fuel oil (HFO) plant.

Most of Syama’s fleet of automated mining equipment is diesel-powered, with the exception of tethered electric loaders, which will run on the power that the hybrid plant generates.

While they would also like to use electric haulage, Resolute feels that the technology isn’t sufficiently advanced yet. However, John Welborn, Managing Director and CEO of Australia -headquartered Resolute Mining feels that it’s coming. “I’m personally convinced that underground mining is going both automated and it’s going electric,” he states. “The advantages in underground mining—both in removing diesel particulates and the various problems created by exhaust gases underground and the nature of ventilation—is huge, as well as having safety and productivity benefits.”

DRIVERS FOR THE SYAMA RENEWABLE ENERGY PROJECT A number of different drivers led Resolute to choose a hybrid solar microgrid, from industry-wide concerns to local considerations.

Energy cost Like many similar projects, finding lower-cost energy was the primary driver. The mine yields a very large-scale, double-refractory ore body

that’s relatively difficult to process. Resolute has made the process of extracting the gold from the ore more efficient and has been increasingly successful with mining at Syama over the last 10 years. However, the process still requires a substantial amount of energy, and Syama has traditionally been a high-cost gold producer as a result.

Because the mine is exposed to fluctuating diesel prices, “the genesis was really recognizing that our current power costs, depending on diesel costs, ranged between 20 and 24 cents a kilowatt hour. And at Resolute we have an ambition to produce gold at a lower cost,” Welborn explains.

Logistical challenges There’s also the significant logistical challenge of delivering diesel to a remote mine site in the south of Mali. “We have quite a strong logistical challenge in a mine that can use between 100 - 200,000 litres of diesel a day across our mining fleet and the power generating units,” Welborn says. And “it’s a long way away from either Dakar or Abidjan, which is where our fuel comes from.”

The site is located in southern Mali close to the border with Côte d’Ivoire, an area that’s still exposed to political uncertainty. Adverse weather conditions during the heavy rain season also impact the logistics of transporting equipment and fuel to the site.

Considering local communities Resolute originally considered connecting to the West African Power Pool, a grid roughly 80 km away from the mine that sources energy from seven gas and coal-fired power stations in Côte d’Ivoire. However, “the

5

grid-connection opportunity...ultimately didn’t project to generate the savings that we had hoped, and also was politically and logistically challenged,” Welborn relates.

Building a microgrid was the most feasible option—one that’s also more environmentally responsible and provides an opportunity to supply power to local communities. “In the sort of place we’re talking about in remote West Africa, there is no greater long-term impact on health, education…[and] the local community than electrification of the community,” Welborn says.

Renewable energy options and the funding for them are increasingly available. “And there’s a couple of other exciting aspects about that,” Welborn says. One is the opportunity to develop a more sustainable, renewable, and ultimately lower-cost power solution for the mine.

The other is that “instead of that traditional approach of looking to expand an infrastructure grid with power, there’s actually the remote users at the mine being the catalyst for the creation of a microgrid [that delivers power to] the local communities around the mine that we operate.”

A DUAL-TRACK PROCESS Resolute’s process to reach a decision on power lasted roughly two years. “Internally we got a study team and we looked at a self-perform option,” Welborn explains. “But we also went out and tendered to interested parties and people who could propose to provide us with a power solution.” The company ultimately partnered with South Africa based Ignite Energy, to finance, construct, and operate the new power plant because of the ability to have the new power plant financed off-balance sheet.

“We have made an investment of more than

6

“The grid-connection opportunity ultimately didn’t project to generate the savings that we had hoped, and also was politically and logistically challenged” John Welborn, Managing Director and CEO, Resolute Mining

POWERING UNDERGROUND MINE

$US200 million in the construction of the new underground mine at Syama, new equipment, the new twin declines, and new ventilation and pumping infrastructure related to that underground mine,” Welborn explains. “The ability to use an IPP model where we are not responsible or required to fund the power station—we’re just required to pay for the power it generates over a long-term off-take—is a value-creating solution for us.”

Falling prices for solar and battery storage are making the business case easier for mines.

As a result, many miners are less hesitant to spend their own capital on power solutions, according to Ignite Energy’s Managing Director, Grant Berndsen. “There’s a greater willingness to explore options for outsourcing power supply through third parties and allow the mines to direct capital, their efforts, and expertise into mining.”

INTEGRATION IS KEY The Syama plant uses freely-available, tried, and tested technologies that are currently in operation, and Ignite Energy is partnering with contractors that have rolled out these individual technologies on a number of plants over many years. However, how those technologies are brought together and interface with the mine’s requirements is crucial. Syama runs very energy-intensive equipment that needs to operate seamlessly. “Making sure you are providing seamless power and are quick to respond to the needs of the mine’s power requirements are the key,” Berndsen relates.

A number of projects where solar was tacked onto a diesel or HFO plant retrospectively have experienced problems, according to Berndsen. That type of structure “places some risk on the project, and you experience, very often,

7

“Making sure you are providing seamless power and are quick to respond to the needs of the mine’s power requirements are the key” Grant Bernsden, Managing Director, Ignite Energy

8

POWERING UNDERGROUND MINE

that the maximum savings aren’t realized because the hybrid controller isn’t designed and operating in an optimized fashion. So a lot of the success of the project is hinging around that integration technology.”

FUTURE INNOVATION The rapid development and falling cost of battery storage mean that Resolute is positioned to take advantage of this development into the future. In parallel to the potential future transition of Syama to a fully-electric underground fleet, Resolute and Ignite Energy will continue to assess the advantage of incorporating large-scale and long-duration battery storage to minimise the use of fuel within the overall hybrid power plant. Whilst Resolute views fully-electric underground haulage and predominately renewable-powered hybrid power systems as yet-to-be-viable, the Syama Gold Mine is positioned to be one of the first mining operations to take advantage of this technology when it reaches maturity.

ADVICE FOR MINERS Resolute fired the first production ring on the new Syama Underground Mine in early December, and the hybrid power plant is slated to come online towards the latter part of 2020.

When that happens, Syama will be the latest case study that other mines can look to. Welborn advises miners to seek out several case studies, such as the Sandfire mine near Resolute’s headquarters in Western Australia, which built a large solar component for its energy needs, or a number of other mines in Africa that are implementing similar projects.

It’s important for miners to evaluate all of the options, according to Welborn. “Our experience running a dual-track process was evaluating our self-perform opportunities, evaluat-

ing the ability to refurbish our existing power generation, construct new power generation, and comparing and contrasting it, but also collaborating with various other external parties proposing solutions,” he shares. “My advice would be run a very clear, well-publicized study of all of the available options.”

The Syama Gold Mine is more than just another case study. The project is “special because it’s going to provide other mines and other bulk energy users in similar jurisdictions the confidence that this technology can be applied elsewhere,” Berndsen says. “Being able to promote creative, technical, and commercial structures to a customer like this will open the eyes of other customers and funders alike to what’s possible.”

Syama might enable funders to take a less conservative view on similar projects and become more comfortable with the idea of deploying renewable technology on the continent as a whole, Berndsen hopes. “Having this kind of pioneering, trailblazing-type project is extremely exciting.”

“The project is special because it’s going to provide other mines and other bulk energy users in similar jurisdictions the confidence that this technology can be applied elsewhere” Grant Bernsden, Managing Director, Ignite Energy

9

AFFORDABLE RELIABLE SUSTAINABLE ENERGY FOR MINES

10

https://australia.energyandmines.com

EXHIBITION SALES NOW OPEN CONTACT JOHN.HODGKINS@ENERGYANDMINES.COM

11

INDUSTRY STRIVES TOWARDS

1OO% RENEWABLES

By Melodie Michel

“We have to do things radically differently.� The opening sentence of keynote speaker Kim Truter, CEO of DeBeers Canada, set the tone for a conference that broke a number of records. The sixth edition of the Energy & Mines World Congress, held at the Hilton Toronto on December 10 and 11, 2018 gathered its largest number of attendees yet at over 300, with a record proportion of mining delegates at 30%.

12

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

Kim Truter, CEO, DeBeers Canada delivering powerful keynote

13

The number of renewables integration projects announced or discussed also surpassed previous years, and made one thing clear: the 100% renewable mine is no longer a distant fantasy, and many factors are driving this now very real ambition.

A changing consumer base, increasingly composed of demanding and environmentconscious millennials, is the main reason consumer-facing miners like diamond or gold producers are having to change the way they do things. In 2018, DeBeers launched its Lighbox laboratory-grown diamonds, and now offers customers a chance to compare the environmental footprint of natural versus synthetic stones.

“So we need to have our finger on the pulse about consumer demands: 95% of our end consumers are female, a lot of them are generation X or millennials, expectations are changing and the days of destroying the environment are coming to an end,” said Truter.

“We use as much energy as the Netherlands”

Ron Miller, Principal Advisor, Energy, Productivity and Technical Support, Rio Tinto

14

Other speakers confirmed the sentiment, and millennials in the room were eager to encourage the transition, mentioning their environment, social and governance (ESG) priorities when making investments.

Changing demographics aside, financial and environmental factors are undeniably pushing miners towards a cleaner and more efficient production process: deposits are getting smaller and being discovered in more remote areas where power infrastructure is prohibitively expensive, and carbon taxes are adding unprecedented weight to expenses.

The amount of diesel used to power mines is astronomic: 250 million litres a year for three DeBeers mines in Canada, 3 million litres a month according to Algold, 130 million litres a year shipped to Agnico Eagle’s Nunavut sites - the few numbers disclosed at the conference painted a worrying picture. “We use as much energy as the Netherlands,” summed up Ron Miller, Principal Advisor, Energy, Productivity and Technical Support at Rio Tinto.

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

Diesel is a highly volatile commodity, so this heavy reliance on fuel comes with tremendous price risks that miners are now looking to mitigate with renewables. “In our industry, we’re price takers, not price makers, so we have to find solutions to reduce costs, said Tony Makuch, President, CEO and Director of Kirkland Lake Gold.

Additionally, transporting diesel to remote mines is not without challenges. In his case study on energy costs in Canada’s North, Christian Soucy, Superintendent, Nunavut Energy Optimization at Agnico Eagle, lamented the fact that, on top of releasing the GHG equivalent of 17,000 cars a year, his company’s operations are affected by diesel pathway disruptions of all kinds: ice in the winter, and wildlife migrations in the summer.

Government pressure is another factor: populations around the world are loudly voicing their discontent over industrial and environmental policies, forcing leaders to take strong action against industry, including carbon taxes. “There are massive movements

from populations, and governments are defenceless, so we need to help them by presenting them with our sustainable strategy,” pointed out Benoit Lasalle, Chairman of Algold Resources, Sama Resources and SRG Graphite.

But transitioning to clean energy today is also seen as a way to reach energy security and hedge against political risk, ensuring miners can continue operations independently of volatile government policies. All these factors, combined with a low interest-rate environment that’s making renewables investment more attractive than ever, are contributing to create what speakers called “a perfect storm”.

And while there’s still a long way to go to reach the 100% renewable mine, every little step counts. “Even small systems serve a purpose: they break the psychological barrier, so when you install the bigger system, people are ready,” encouraged Tsakani Mthombeni, Group Head of Carbon and Energy at Gold Fields.

PROJECTS BIG AND SMALL

“Even small systems serve a purpose: they break the psychological barrier, so when you install the bigger system, people are ready,”

Tsakani Mthombeni, Group Head of Carbon and Energy

15

“There are massive movements from populations, and governments are defenceless, so we need to help them by presenting them with our sustainable strategy�

Benoit Lasalle, Chairman, Algold Resources, Sama Resources, SRG Graphite

16

The most groundbreaking project presented at the conference was undeniably DeBeers’ Chidliak site, qualified by Truter as “the poster child of off-grid Arctic renewable energy”. The company has made a public commitment to reduce its energy requirements by 8% and cut its GHG emissions by 9% by 2020, but now wants to go much further. With the recent acquisition of Peregrine Diamonds, it inherited seven properties in the Canadian North, including Chidliak, on Baffin Island - a place that runs 100% on diesel.

“Can we make our Chidliak project 100% renewables? It is possible if we really challenge ourselves,” Truter added. The company is looking at a number of different approaches to achieve this: shrinking footprint in terms of mine size, number of people, power and thermal requirements; partnering with others to leverage available natural energy sources including solar, wind and geothermal; tapping into energy storage to manage power fluctuations; and considering a single, moveable power solution business model to achieve longer returns.

Another revolutionizing way DeBeers hopes to reach that objective is by avoiding the building of a road to the site, driving the need for energy self-sufficiency. “Don’t just think ‘autonomous trucks’, think ‘no trucks’,” the Canada CEO challenged the audience.

As the 100% renewable mine was the central topic of the conference, informal chats revealed rumours that both Codelco and BHP have plans to reach this goal on at least one mine site within four to six years - which will hopefully be confirmed in 2019.

Miners of all tiers talked about their plans to make processes cleaner and more efficient: Agnico Eagle is targeting a 10 to 25% reduction in diesel use

17

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

in three Nunavut projects. After assessing the benefits of building power lines, using hydro power and integrating liquefied natural gas (LNG), among other solutions, the company has opted for a winddiesel microgrid. Agnico Eagle aims to prove readiness by early 2019 on what would become the world’s largest wind-diesel microgrid.

Ultimately, the company also hopes to electrify its systems.

Algold Resources is planning a 65 MW solar plus batteries plant in Niger, which should bring its electricity cost down to US$0.10/kWh instead of US$0.33/kWh for fuel.

B2Gold is building a 21km overhead power line to connect its Otjikoto mine to the Nampower grid which, combined with the 7MW solar plant it opened in 2018, would reduce the heavy fuel oil (HFO) proportion of the mine’s power mix to just 9%. Namibia Director and Country Manager Mark Dawe also presented the operational results of the Otjikoto solar farm: on a record day it generated 21% of the mine’s total energy requirements, allowing the shutting down of an HFO generator set for 10 hours. The yearly generation average from the farm is 17%, it has saved B2Gold 2.1 million litres of fuel so far, and the 4.3-year predicted payback period has been reduced by the savings from not having to run diesel generator sets.

Glencore has plans to make the Craig Mine-Onaping Depth nickel project in Sudbury, Ontario, one of the first electric mines in the world, by using battery-operated vehicles, real-time information software and the latest mining and engineering technology. Since nickel is one of the metals whose demand is rising as a result of the growth of the electric vehicles market, this move makes a lot of sense for Glencore.

Gold Fields has set the goal of making its Salares Norte mine in Chile 20% powered by renewables, among many other green initiatives.

According to Mthombeni, the Agnew hybrid power station, to be commissioned in 2019, will also “claim a lot of firsts”. Stay tuned.

18

IAMGOLD is taking its Essakane solar project to the next level by upping capacity from 15MW to 34MW and adding batteries to the system. With these changes, contractor Total Eren expects fuel savings to reach 1,400 tonnes a month. IAMGOLD already foresees savings of 6,000 tonnes of fuel in the first year of operation of its solar farm at current capacity.

In the mid-tier segment, representatives from Teranga Gold, Kirkland Lake Gold, Nordgold, Hudbay Minerals and Tahoe Resources all have projects in the works to integrate renewables in the short to medium term, some as soon as next year, some for long-term projects.

Amiram Ruth-Deblon, Head of Global Business Initiatives, juwi Renewable Energies discusses the Degrussa mine project

19

MARKET TRENDS PRICES CONTINUE TO DROP

The most noticeable trend in the renewables for mining market is the downward curve of the price of both renewables and storage. “If you’re not an environmentalist but a capitalist, you can see the benefit of renewable energy as opposed to five years ago,” said Rio Tinto’s Miller.

Of course, the attractiveness of renewable energy depends largely on mine location and here Africa and Australia seem to be clear winners.

At Newmont, Mike Aire, said when the firm first considered a 10 MW solar plan three years ago in Ghana, capital and installation costs were still too high, and a power purchase agreement (PPA) with an independent power provider (IPP) would have been too long for the mine life. But today with the availability of pre-fabricated systems, Newmont was able to reduce its electricity costs from US$0.13/kWh with the grid to US$0.06/kWh with a small solar installation.

In her presentation, Sophie Lu, Head of Metals and Mining at Bloomberg NEF, explained that in Australia for example, both PV plus storage and wind plus storage are already competitive compared to conventional energy solutions. And Amiram Roth-Deblon, Head of Global Business Initiatives at juwi, is of the opinion that as of today, on a 13-year mine life in the Northern Cape of South Africa, a solar farm can already provide cost savings compared to Eskom’s grid prices.

PPA STRUCTURE PREFERENCE KEEPS GROWING

According to Bloomberg’s Lu, renewable procurement for mines is leaning more and more towards a PPA structure, as opposed 20

to ownership. This is helped by the fact that PPAs are getting shorter and more flexible: contracts of six or seven years, unthinkable a few years ago, are not available in some markets.

At the time Sandfire Resources had a solar farm installed at its DeGrussa site, no one was keen to take on the risk of the solar system, so the company had to use two PPAs: one for conventional energy, and one for solar. “Today, we would do one PPA only,” said Roth-Deblon of juwi.

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

Fitch Solutions Renewables Risk/Reward index providing an attractiveness index for integrating renewables in mining.

Darker areas represent the most attractive regions according to Fitch analysis.

However Dawes of B2Gold made the case for ownership - the structure chosen at Otjikoto: “you get 100% of the benefits, as opposed to around 25% in the case of a PPA�.

ELECTRIFICATION GAINS GROUND

Many miners, including Newmont, Rio Tinto, Gold Fields, Vale, Goldcorp and Glencore, are working to electrify their hauling fleets, which implies some structural and training changes. The move has been welcome by most operators: John Mullany, Vice President

of Corporate Affairs and Energy at Goldcorp, has even witnessed underground mine workers choose a lower-paying company that offers better air quality over a better paid position in an unhealthy environment.

This electrification is expected to have an impact on metals demand in the coming years: nickel is expected to outperform all other metals as battery demand grows and the nickel, manganese, cobalt (NMC) cathode becomes the chemistry of choice, according to Michelle Karavias, Deputy Head 21

MINING GENERATION PROJECT, BY STRUCTURE INSTALLED CAPACITY (MW) 400

300

Direct ownership

200

PPA or other 100

0 Source: Bloomberg NEF

2010

11

12

13

14

15

16

(Graph 1)

MINING GENERATION PROJECT, BY STRATEGY INSTALLED CAPACITY (MW)

Embedded Generation Hosting an IPP Miner as IPP Renewable energy subsidiary Miner as IPP Source: Bloomberg NEF (Graph 2)

22

17

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

of Industry Research at Fitch Solutions. Nickel will lead cobalt and lithium - two other main components of batteries - by a very large margin.

HYDROGEN AS A LONG-TERM OPTION

Hydrogen technology was mentioned by many speakers as an interesting option for large-scale storage and electrification applications. There is particular interest in Canada, nicknamed by one speaker as “the Silicon Valley of hydrogen”. But many challenges remain: Bloomberg’s Lu reminded the audience of its “incredibly expensive” cost, particularly if produced from renewable sources: US$32-41 per gigajoule (GJ), compared to US$15-20/GJ if produced from fossil fuels, and US$3-11 if produced from natural gas.

Utility company Engie is investing heavily in hydrogen, and an inspiring presentation

by Asthma Lahjibi, Senior VP of Business Development and Koen Langie, Senior Hydrogen Solutions Developer, invited attendees to open their mines to the idea that

100% renewables is achievable, and that hydrogen is the key. But Langie admitted that fitting a hydrogen tank on a mining truck presents challenges: “Hydrogen is 10 times lighter than batteries, but needs three times more space than a diesel tank,” he said.

OTHER TRENDS

Among other market trends, there seems to be interest in using biofuel to power trucks, particularly for Algold. Chairman Lasalle also spoke of the company’s plan to implement “an agriculture strategy” in Africa to create jobs for the local population, increase the mine’s licence to operate, and produce biofuel to be used in mining trucks.

Also on miners’ minds are ways to reduce water usage to improve efficiency and reduce contamination risks. At a clean technology roundtable hosted by the Canadian Trade Commissioner Service, Gold Fields’ Mthombeni invited providers to come up with milling and grinding technologies that would not require water.

Sophie Lu,Head of Metals and Mining, Bloomberg NEF

23

From Left to Right): Leonardo Fusciardi, General Manager of Technical Services, De Beers Canada, Stephen Letwin, President and CEO, IAMGOLD, Sunil Kumar, Director, Energy Strategy, Kinross Gold

THE AGE OF STORAGE

All speakers recognised how strong the business case is to add storage to hybrid or even conventional systems in order to reduce spinning reserve requirements, manage power fluctuations, and more. “Time shifting, capturing the sun’s energy during the day to be used at night, is where we’re heading - it’s only a matter of time,” said Rob Shueffner, Microgrids and Renewables Commercial Manager at Caterpillar.

Lithium-ion batteries are the best-known solution for now, but the game changer will certainly be the incredible wave of innovation happening in the sector: iron flow batteries that use only iron, water and salt, flywheel batteries and compressed air storage solutions have all been implemented on a commercial scale, and mining projects should start seeing deployment in the next year or two.

So while B2Gold’s assessment found that 24

despite strong interest, battery storage would be an unprofitable investment at its Otjikoto solar farm because of installation costs, another, more weather-appropriate solution could soon help it reach its objective.

“At our Burkina Faso site we spend US$80mn a year on fuel, and you can basically eliminate that with good batteries to store solar. This technology can change the world,” said Stephen Letwin, President and CEO of IAMGOLD. “Today we are not looking at any projects that do not include batteries to amortize cloudrelated intermittency,” added Christophe Fleurence, VP Business Development Africa at Total Eren, calling storage “the holy grail of energy”.

The industry interest was truly palpable at the conference’s energy storage elevator pitch session, where Peak Power, Saturn Power, Sungrid, Clean Horizon, Stem and ESS

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

“Time shifting, capturing the sun’s energy during the day to be used at night, is where we’re heading - it’s only a matter of time” Ron Shueffner, Microgrids and Renewables Commercial Manager

25

presented their solutions in a round of three minute presentations.

For renewables and storage systems to truly bring value, delegates were reminded of the importance of an intelligent software component. In this area, the increasing take-up of the Internet of Things (IoT), drone technology and artificial intelligence-based modelling by miners is a positive sign in the industry.

REMAINING ROADBLOCKS

Of course, the road to the 100% renewable mine is not without obstacles: capital costs are still too high for many companies and

miners can struggle to get financing from banks concerned with their own reputation risk. In his presentation, Total Eren’s Fleurence told the audience that a new funder had to be found at the last minute in the IAMGOLD Essakane solar project because the initial funder “pulled out when they realized it was for a mine”.

On the other hand, it’s becoming more and more difficult to get financing for fossil fuelbased projects because of government policies, so powering mines with hybrids should help them get financial support.

Development banks in particular are keen to back projects integrating renewables: the

WIND AND SOLAR COSTS CONTINUE TO FALL LCOE ($MWh, nominal) 350 Utility PV

300 250 200

Offshore wind

Utility PV tracking

150 100 50 0

Onshore wind 3Q 2009

1Q

3Q ‘10

Source: Bloomberg NEF (Graph 3)

26

1Q

3Q ‘11

1Q

3Q ‘12

1Q

1H

1H

1H

‘13

‘14 ‘15 ‘16

1H

2H

‘17 ‘18

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

World Bank doubled the amount of climaterelated finance it provided to clients between 2015-2018. Now, the segment represents one third of its portfolio. The institution has also committed US$1bn for a new global program to accelerate investments in battery storage to help developing countries ramp up their use of renewables. This initiative is expected to mobilize another US$4bn for the sector in concessional climate financing and public and private investments.

supporting Rangold in implementing a 24MW solar farm to offset 11.5 million litres of fuel every year.

In a finance panel at the conference, Sean Whittaker, Senior Renewable Energy Industry Specialist at the International Finance Corporation (IFC), said: “We have never invested in renewables in mines, and this is something we are wanting to change. But don’t reinvent the wheel. The basic principles of bankable agreements are well known: stick to market standards to de-risk your project and get financing.”

The World Bank Group has also launched the Power of the Mine initiative to support the development of cheaper and cleaner power for mines in Africa. Its pilot project is the Loulo mine in Western Mali, where the bank is

206.8 2009

342.2

321.3 268.6

290.7

211.4

205.2 2008

2018

2017

2016

2015

2014

2013

2012

2011

2010

2007

2006

88.0 2005

2004

61.7

128.2

182.2

276.1

324.0

$ billion (Q3 2018)

330.1

CLEAN ENERGY INVESTMENT SLOWING

360.3

Surprisingly, and despite the continued price fall for solar and wind power, investment in

Source: Bloomberg NEF (Graph 4)

27

renewable energy is slowing down: it dropped by 6% between 2017 and 2018. And although many governments are keen to support the clean tech sector, fossil fuel subsidies are still much higher than renewable subsidies, as shown in the report The Renewable Power of the Mine, launched at the conference by the Columbia Centre on Sustainable Investment (CCSI).

said Leonardo Fusciardi General Manager of Technical Services at DeBeers Canada.

This is the type of policy inconsistency that could prevent faster renewables take-up in mines. Among other government-related issues, the back and forth experienced in Ontario as a result of the successive election of opposing parties was cited as a barrier to renewables investment.

It is an idea that was mentioned by various speakers, but it is likely to take a lot of work.

As IAMGOLD’s Letwin pointed out: “We have a long way to go to train all of our mines about what this renewable transition really means.”

But the biggest roadblock is cultural: “In the 100% renewable world, our culture of continuous operations may have to change,”

Mike Aire, Environment Director, Sustainability & External Relations, Newmont

28

Changing the mining business model to take advantage of cheap or free energy during the day and allow for downtime when renewables are not available could reduce the gap that needs to be filled by storage, and propel the industry towards the 100% clean power goal.

Patience will be key in overcoming these issues, but judging by this year’s World Congress, the industry has turned a corner from which there is no going back.

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

CLICK TO ACCESS

SUMMIT VIDEOS

SUMMIT PHOTOS

SUMMIT PRESENTATIONS

DATE FOR YOUR DIARY!

CONTACT: ANDREW.SLAVIN@ENERGYANDMINES.COM 29

30

INDUSTRY STRIVES TOWARDS 100% RENEWABLES

31

With the Federal Backstop and provincial carbon regulations coming into effect, Canadian industry is being challenged by new benchmarks, timelines, pricing and rules.

CARBON PRICING FOR CANADIAN INDUSTRY, APRIL 25-26, HILTON TORONTO, will provide energy intensive industries with critical insight on benchmarking carbon strategies and managing compliance across Canada.

For full event details, visit: https://carbon.canadianclean.com Organized by Canadian Clean Energy Conferences