Exploring alternative energy options during prefeasibility. (Alternative or greenie approved energy)

Transcription

1 Exploring alternative energy options during prefeasibility - in general terms, or (Alternative or greenie approved energy) Philip Andrews Mines and Money Hong Kong 2017

2 Options Alternative is replacing carbon insensitive energy: coal and oil /diesel by Solar Wind Hydro Biofuel Geothermal Atomic But the greenies will make issues of Hydro - changing hydro systems / dams: social and environmental impact Nuclear - radiation and disposal of used fuels

3 Motivation So why are we discussing this? Pressure from the greenies or the greenie political groups: Theoretical reasons Contribution and relationship development with local communities Practical and beneficial social partnership Economically beneficial for the mine

4 Options Two types of reduction of carbon usage: Direct: using alternative sources of energy or hybrid Indirect: designing operations to reduce energy footprint Based upon Energy Source assessment Engineering Integration studies If alternative energy is cost effective it is much more attractive

5 Issues Advantages Disadvantages Security & Consistency of supply Intermittency: 15-30% efficiency (wind / solar) esp. in remote locations Seasonal weather affecting also hydro, biomass Solving Shortage of reliable power, Infrastructure deficiencies Importation issues Commodity prices Storage: (battery) requirements - Mines operate 24 hrs Social license + Community Mine life 10-15ys : Generation 50 yrs Clean energy (Air emissions and OP21) Non Profile Business Reducing dust, noise, air pollution Mine must become generator - and sell energy (over supply or after LOM) Special HR requirements Additional H&S

6 Hybrids Advantages Disadvantages? Intermittency requires traditional sources Back Up supply Utilities can be turned on or off Site logistics CAPEX financing of additional supply / sources not often justifiable Cost reductions Additional professional requirements

7 Funding Advantages Disadvantages Many financial institutions won't invest in ventures that are using fossil fuels Financial institutions will not invest in crazy financial models where CAPEX:OPEX relationship is uneconomical Reduction of OPEX Increasing CAPEX: Capital intensive Income from sale of extra power to utilities Debt financing required and difficult to achieve based upon a 50 yrs spread Export credits (supporting finance but not price reduction) Reduction of fuel transport costs Reducing water requirements Spare parts and maintenance

8 Who is alternated? Commerce Energy (REE) assessing Wind Power Galaxy Resources (Li) Three 1.2mWh wind turbines one mw Solar tracker IAM Gold (Au) - Solar 5mW in Suriname (Rosebal Mine) 15 mw in Burkina Faso (Thermal combined 57 mw OCP (P) - Wind Water and Energy saving with slurry line 350 mw, targetting 600 mw in 2020 Antofagasta (Cu) Solar (Los Pelembras) 69.5 mw provided by SunEdison Barrick (Au) Solar (Goldstrike mine NV) 1.51 mw, built due to legal requirements delivering to plant's natural gas plant > 1 mwh: < 1mWh: Coldelco / Cronimet / JuWi / Tech Metals. Rio Tinto / Shanta Gold / Ozkoyuncu / BHP Billton / Anglo American (

9 New Solutions: Mini Nuclear Operating in Russian arctic: Bilibino ( ) Four 62 mwt (thermal) units Graphite-moderated boiling water design Producing steam - heat & 11 mwe electricity. Cheaper than fossil fuel alternatives in Arctic 9 New designs <25 MWe for off-grid remote sites. Medium level of technology readiness Expected to be competitive against diesel. Gen 4 Hyperion -nuclear reactor 25 mwe (2030) NuScale Power 50 mwe from 30 m tall plant (est. $ kwh) Rosatom floating nuclear stations >35mWe

10 New Solutions: Renovagen UK based company developing Solar energy roles contained in mobile trailers Current max 15 kwh Cost per unit: 50-70K

11 New Solutions: Ganz EEM Hungarian based company developing mini hydro-electric power plants based on a standard container Site Selection -preconditions: Mountain rivers with necessary Water pressure -1.8 m3 per sec - 50 m drop mwh

12 New Solutions: PFISTERER - hybrid CrossPower system (Germany): control unit All components transported in two 20 ft. containers high-performance batteries wind turbine Integrating solar and wind energy to mineral exploration. Output:150 kwh / Storage capacity : 100 kwh, Quick connection of the system (plug and operate) Fast assembly without qualif ied personnel. solar panels 2 diesel generators.

13 The accounts CAPEX OPEX HR Requirements Labor related costs /Social taxes Transportation costs Equity and Debt financing Working Capital VAT returns on Capex expenditure Taxable Revenue Depreciation and Amortization Not just about CAPEX & OPEX but also about Taxation Dividends.

14 Cost of Energy : Capital costs

15 Cost Comparisons

16 Cost Comparisons

17 Conclusions Exploration companies: value in considering small solar / wind for camps to reduce diesel costs and transportation to remote sites Alternative energy should be considered in Scooping studies / PEA / EIA / SIA Analysis of alternative vs fossil may become a BFS requirement Consultancies preparing Technical and Feasibility studies should include or be asked to include such in the respective documents need to attract on to their team who can contribute professionally need to be challenge to perform to highest standards The inclusion in reports and strategy of alternative options will allow companies to balance social-economic benefits with environmental footprint. One would hope that local communities and governments would understand that black and white energy use policies may actually be harmful to economic growth.