Tuesday, September 8, 2015

Temporary Power: Keeping the Mining Industry Buoyant Through the Trying Times

The present times have not been favorable to the mining industry.

Many mine operators in Africa, Asia and South America have been facing myriad production-related challenges, owing to power shortages, not helped by the longer and stronger than expected El Niño phenomenon. El Niño, a cyclical meteorological phenomenon, brings extreme weather to parts of South America, Southeast Asia, Australia and Africa. For instance, mining operators in Indonesia, a major nickel and copper producer, have been facing consistent output drops as hydroelectric power facilities fail to generate enough electricity. In Peru and Chile, persistent heavy rains not only cause extreme flooding into zinc mines, affecting their production and triggering price spikes, but wide spread blackouts and damage to power infrastructure.

Then, there is the gradual decline of prices of commodities for the past several years. Prices of gold, silver, iron ore, coal and copper have all been negatively affected by stringent credit restrictions, weak global demand and a growing supply from new low-cost projects. As a result, mining companies, established and start-ups alike, are struggling to maintain a profitable production, resulting in job cuts and tighter cash flows and limited expenditures.

In such a case, mine operators can find huge benefits in hiring the services of temporary power providers. Electricity plays an undeniably essential role in mining operations, be it in exploration, production, climate control or workplace visibility, and rental power plants can provide the necessary electricity without the operators spending scarce CAPEX. As opposed to investing in permanent power infrastructure, mining companies can pay for the electricity produced by hired power plants from their operating revenues. As their operations expand and their power requirements increase, mine operators will be able to add additional power modules that will increase the rental power plant’s generation capacity. The investment in temporary power plants have been proven to be marginal compared to the cost of foregone opportunities, lost production time, or wasted man-hours.

As rental generators are modular and containerized, they can be rapidly delivered to and installed anywhere in the world, and can be tailored to the requirement of any mining site. They are fully able to function even in remote locations and in sites where traditional power infrastructure, like grids and substations, is outdated, damaged or absent. They can be fully constructed and powered on in a matter of days, and can be ramped up or scaled down depending on a site’s power usage demand.

Modern rental generators boast of a cleaner operation, being able to run on a variety of fuels, including natural gas or dual-fuel (70% gas and 30% diesel). As a case in point, Caterpillar’s natural gas-powered generators surpass the NOx emission requirements, emitting only 250 mg/Nm3 even without after-treatment.

Caterpillar’s gas generators are also capable of converting coal mine methane to electric or thermal power, which contributes to the reduction of greenhouse gas emissions. The gas generator technologies have the ability to utilize gas with variable concentrations of methane.

The global mining industry is going through challenging times triggered by natural and economic circumstances. Temporary power technologies can give mine operators a sustainable competitive advantage, as they can enhance a site’s productivity and optimize its processes without the need for a sizeable capital expenditure.


Altaaqa Global
Tel: +971 56 1749505

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