Why Do Mines Consume Enormous Amounts of Electricity?

Mines require copious amounts of electricity to support various functions. In fact, owing to the huge amount of work and processing that go into production, mining is one of the most energy-intensive industries in the world, accounting for approximately 5% of the global electricity consumption.

To further illustrate, in Chile, considered as the world’s largest copper producer, mining is responsible for more than 20% of the country’s total power consumption. In Zambia, mining accounts for a whopping 50% of the country’s power utilization.

Obviously, no mine can operate without electricity. And without mining, the world will see no houses, skyscrapers, vehicles, airplanes, mobile phones, laptops, computers and a gazillion other things. But, have you ever wondered just how much electricity is required to power a mine throughout its lifetime?

Let’s have a quick look at some of the energy-intensive work that takes place in a mine. There is blasting open the earth, crushing and grounding millions of tons of ore, and chemically processing the ore prior to export. Round-the-clock. Throughout the year.

Then, there are the electricity-gobbling pieces of machinery, like rope shovels. Rope shovels alone are said to require an average of 11,000 KW throughout its 20-hour operation.

There are also additional energy-consuming factors which vary from mine to mine. Let us say, the presence of underground water. Do you know that pumping out millions of liters of water every day consumes an amount of electricity so huge that it is reported by some mining companies as the largest component of their energy costs?

Electricity is vital to almost every function of a mine that having sufficient power at the site is non-negotiable. Unfortunately, many mine sites across the globe have to cut back on power consumption because of power shortages, load shedding or a limited access to a reliable power supply. Though it should be possible to reduce power consumption in some of the perceived “non-essential” areas, this can only be done for so long before it begins to affect the entire operation and, thus, the production levels.

In response to this risk, many mining companies are deciding to invest multi-millions in building their own power generation or transmission facilities. But obviously, building one’s own energy infrastructure is tremendously expensive, and this can easily jack up the capital cost for a new project. And given the current volatile market condition, and the uncertain future of nascent mines, making such a huge non-core investment may not make sense altogether.

Here, then, lies the conundrum for mine operators: Do they build their own power facility to potentially provide ample electricity to their sites but, in doing so, make a huge capital investment; or be content in reducing electricity consumption in their sites and save money, but miss out on maximizing the site’s production levels?

The truth is, mine operators are not limited to just these two choices.

For example, they can choose to rent power plants instead of building their own. In doing so, they will not have to devote, rather strap, a huge part of their working capital on a non-core investment.

During the feasibility and exploration stages, renting power plants will give them the freedom to start with a small power plant, which they can grow as their operations expand.

Can temporary power plants support mine operations even in remote areas? Sure.

Rental power plants are easily transported from and to anywhere in the world and can function in any site no matter where on Earth it is situated. Temporary power plants can directly connect to any site’s grid even without a sub-station. They can also switch operational modes from grid to island, to base load or to standby at a push of a button in mere minutes, so they can function in mine sites either as the sole source of power or in sync with the grid.

Bottom line, going for the rental option will significantly reduce a mining project’s estimated capital cost and will cushion mining companies from the impact of making a huge non-core investment in this highly volatile mining market.

So, mines consume colossal amounts of electricity because of the number of energy-intensive functions that go into their operations. And, even as the industry faces risks relating to electricity supply and access to reliable energy sources, there are power generation technologies available, like temporary power plants, which can help mine operations sustain profitable levels of production.


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Sources consulted:
“Why mines consume such large amount of electricity”. Zambian Mining Magazine. www.miningnewszambia.com. 16 October 2016.

How Can Rental Power Help Grow Mining Operations?

The mining industry has played an integral part in the history and progress of countries and communities where it exists. Many mines sites, however, are in remote locations, where power infrastructure may not exist or are still developing, or where a reliable connection to national grids can still be improved. This poses a challenge to mine operations, established and developing alike, particularly in light of the fact that without access to a sufficient or reliable source of electricity, mining companies run the risk of losing on profit, valuable production time or opportunities for growth.

Temporary power and the Mining industry

It is most advantageous to specify temporary power during the pre-feasibility/feasibility stage of mining operations, when mining companies are applying for finance. This could help them secure financing for the project.

Temporary power solutions can support the growth phase of mine operations, because they provide flexibility, scalability, risk mitigation and cost minimization. Specifying the services of temporary power providers during this stage will preclude the need for mining companies to spend scarce CAPEX in procuring their own generators or building permanent power facilities. With temporary power, mines can opt to start small, then add power capacity as their operations grow. They can pay for the rented electricity from their operational profits.

As mine operations develop and become established, mining companies will eventually find benefit in building their own permanent power plants, which, however, may take a substantial amount of time to complete. While the permanent power plants are being constructed, temporary power can sustain the mine operations. As soon as the permanent facilities are constructed and fully operational, mining companies can simply end the contract, and the temporary power plants will be immediately demobilized. This way, mining companies will not have surplus equipment, because everything was only rented.

Temporary power solutions are also beneficial for ongoing mine operations, in times of power shortage or emergency situations. When mine operations need additional power to sustain production, temporary power providers can easily deploy and install temporary power plants at their sites in a matter of days to supply continuous and reliable electricity.

As commodity prices remain depressed, and full economic recovery continues to be elusive for developed and emerging countries alike, mining companies are in the midst of challenging times. In these times, mining companies cannot afford to subject their operations at risk, owing to lack of funds or long project lead times. Renting power does not require spending scarce CAPEX that is usually related to building permanent power plants. Temporary power plants can also be tailored to any power or voltage, so there is no longer a need to build support power infrastructure to run the rental plants. Additionally, installing temporary power plants will only take days, whereas constructing a permanent power infrastructure may span longer periods of time. This means that in a short time, mine operations can be up and running, and producing.

Hiring electricity can prove advantageous for both established and nascent mine operators. It can provide operational flexibility, enhance a site’s productivity and help optimize its processes without the need for a long lead time and a sizeable capital expenditure. As mining companies realize the benefits of hiring power, it will no longer be uncommon in the coming years to see larger temporary power plants being hired on a longer-term basis within the mining industry.

End 

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To Rent or Go Permanent: A Mining Perspective

By: Julian Ford, Chief Commercial Officer, Altaaqa Global CAT Rental Power

The mining industry has played an integral part in Africa’s history and progress. Though currently weathering unfavorable economic circumstances, Mining will continue to be important in the progressive growth of the continent’s economy.

Africa is instrumental in providing the world with precious metals and commodities, including platinum, diamond, gold, copper, steel and aluminum. Many of the mines sites in Africa, however, are in remote locations, where power infrastructure may not exist or are still developing, or where a reliable connection to national grids can still be improved. This poses a challenge to mine operations, established and developing alike, particularly in light of the fact that without access to a sufficient or reliable source of electricity, mining companies run the risk of losing on profit, valuable production time or opportunities for growth.

In coming up with a solution to ensure a consistent supply of electricity to the sites, mining companies often find themselves choosing between building a permanent power plant or turning to temporary electricity. Julian Ford, Chief Commercial Officer of global power solutions provider Altaaqa Global, shares his insights on how temporary power solutions can benefit mine operations especially during these economically trying times.

Why rent?

It is most advantageous to specify temporary power during the pre-feasibility/feasibility stage of mining operations, when mining companies are applying for finance. This could help them secure financing for the project.

“Temporary power solutions can support the growth phase of mine operations, because they provide flexibility, scalability, risk mitigation and cost minimization,” says Ford. Specifying the services of temporary power providers during this stage will preclude the need for mining companies to spend scarce CAPEX in procuring their own generators or building permanent power facilities. “With temporary power, mines can opt to start small, then add power capacity as their operations grow. They can pay for the rented electricity from their operational profits,” he says.

As mine operations develop and become established, mining companies will eventually find benefit in building their own permanent power plants, which, however, may take a substantial amount of time to complete. “While the permanent power plants are being constructed,” says Ford, “temporary power can sustain the mine operations. As soon as the permanent facilities are constructed and fully operational, mining companies can simply end the contract, and the temporary power plants will be immediately demobilized. This way, mining companies will not have surplus equipment, because everything was only rented.”

Temporary power solutions are also beneficial for ongoing mine operations, in times of power shortage or emergency situations. “When mine operations need additional power to sustain production, temporary power providers can easily deploy and install temporary power plants at their sites in a matter of days to supply continuous and reliable electricity,” says Ford.

As commodity prices remain depressed, and full economic recovery continues to be elusive for developed and emerging countries alike, mining companies are in the midst of challenging times. “In these times, mining companies cannot afford to subject their operations at risk, owing to lack of funds or long project lead times. Renting power does not require spending scarce CAPEX that is usually related to building permanent power plants. Temporary power plants can also be tailored to any power or voltage, so there is no longer a need to build support power infrastructure to run the rental plants. Additionally, installing temporary power plants will only take days, whereas constructing a permanent power infrastructure may span longer periods of time. This means that in a short time, mine operations can be up and running, and producing.”

“Hiring electricity can prove advantageous for both established and nascent mine operators. It can provide operational flexibility, enhance a site’s productivity and help optimize its processes without the need for a long lead time and a sizeable capital expenditure,” says Ford. “As mining companies realize the benefits of hiring power, it will no longer be uncommon in the coming years to see larger temporary power plants being hired on a longer-term basis within the mining industry.” 

*This article was published in the Web portal of Mining Weekly, South Africa: http://goo.gl/hHUWqa

End

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