Industry News

New report on energy costs for mining industry

The report, titled Renewables in Mining and conducted by Deloitte Access Economics, discusses the renewables landscape and its relationship to the mining industry. It also identified ways mining companies can decrease energy costs by implementing “effective energy management programs”.

According to the report, energy is one of the biggest expenses for the industry, constituting approximately 30 per cent of operating costs.

“By having an effective energy management program in place, and with renewables a major component of this, miners can substantially reduce their energy costs by up to 25 per cent in existing operations and 50 per cent in new mines,” report co-author and Deloitte partner David Cormack said.

“We’ve seen leading mining companies go public with aggressive targets toward becoming carbon neutral. With the traditional barriers of cost and reliability diminishing, renewables have reached a position where they really have to be in the consideration set, at the very least, for new mines.”

The report also indicated that companies that use renewables to lower costs, improve safety and mitigate risks would ultimately gain a “competitive advantage”.

“Renewables developers are seeking industrial customers who can offer utility-scale opportunities,” Cormack commented.

“New ecosystems are developing, and business models exist for defraying the upfront costs and sharing the value opportunity.”

Cormack noted that taking advantage of all of the benefits from renewables involved more than installing solar or wind technologies.

“Realising the full benefits from renewables involves more than installing a solar array or wind turbines, it requires a willingness to rethink operational processes and to reconsider the way work is done,” Cormack said.

“However, whilst miners need to challenge their capital projects groups and design teams, they do not necessarily have to go it alone.”

Renewables in Mining is part of Deloitte’s Energy Management in Mining series of reports that explore the value of energy management in the mining industry and can be viewed here.

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