The Mining Sector Is Going Green
Mining is one of the most energy-intensive industries there is. And most of its energy comes from fossil fuel-based sources.
But like every other sector, the mining industry needs to use less carbon to help meet climate change targets.
And it should. After all, it’s estimated that the mining industry uses about 11% of global energy supplies.
But it gets even worse…
Overall energy demand in the mining sector is expected to jump 36% by 2035. The reasons are twofold.
The first is rising demand for all kinds of minerals. Many of those minerals are used by renewable energy technologies, including our increasingly electrified transportation systems.
Mines are working 24/7 to accommodate this demand. And that uses more energy.
The second is a drop in overall grades of mined ore. Many of the best ore deposits have been mined out.
Mining lower-grade ore means mines have to either run longer or expand production. This uses more energy too.
Some large mines are now trialing all-electric mining trucks. These are more energy-efficient and eliminate fossil fuel use.
There’s just one downside. Those giant battery packs have to be recharged, using even more electricity.
Some mines are also located in remote areas. Adequate transmission line capacity in these areas may be too expensive or not available at all.
Fortunately, there’s good news…
Mining Goes Green
Shareholders, customers and surrounding neighbors are all calling on mining companies to start using renewables. And miners are responding.
Ten years ago, renewable energy was expensive. But today, renewables are fast becoming the new go-to energy source for mining companies.
Its cost has come down at an unprecedented rate. And the technology is no longer an issue. Solar and wind energy have been developed and deployed far faster than anyone expected.
Today, the mining industry is keenly focused on wind, solar and battery storage systems. Many companies already have tests underway at their mines.
Some mines are choosing to build and operate their own renewable power projects. Others are contracting energy from third-party providers.
Depending on the size of the installation, the mine may not be the only power recipient. Local communities near mine sites are often given access to electric power from the renewable power project.
So if a mining town has to be created to house workers, it too will be electrified. This helps build goodwill between the mining company and its neighbors.
Not So Fast…
Moving to renewables at mine sites has had a few technical hurdles.
The variability and intermittence of the sun and wind are a problem. On-site energy storage solves some of that problem.
But modern mines generally run 24 hours a day, every day. Backup energy sources are still needed occasionally at night.
In the end, deploying renewables at mining sites will drastically help reduce the global carbon footprint.
Now investors have yet another reason to invest in the renewable energy sector. I believe it is going to be the fastest-growing sector for at least the next decade.