Latin America’s embrace of solar energy is enabling mining companies to procure more cost-competitive energy.
Energy Intensive Mining in Latin America
It is estimated the global mining industry consumes 400 terawatt-hours of energy per year1, the equivalent of the yearly energy demand of France. A large portion of that energy is consumed in the mineral-rich Latin America. Home to the world’s largest deposits of copper, silver, lithium, and gold, the mining sector in this part of the world is a multi-billion-dollar industry and has increasingly been turning to renewable energy2 to help meet its energy demand3.
The mining end product required to meet the world’s growing need of these elements consists of highly energy intensive processes4. Currently this energy use can account for over one third of the cost5 of a mining operation and is likely to increase as the low-hanging-fruit ore deposits become exhausted, leading to more complex mining techniques that have greater energy requirements.
Incorporating Renewable Energy into the Mining Process
In order to alleviate these issues, mining companies are increasingly turning to ever cheaper solar PV and wind power to meet their power requirements, reduce their greenhouse gas emissions, and lower their operating costs.
Renewable energy from non-conventional sources in Latin America has been gaining momentum and proving to be a viable alternative energy solution. For example, over the last five years alone, Chile has increased their renewable energy share from 5% to 18% of their total usage. Power generated by solar plants has become very competitive compared to traditional forms of power – especially in Latin America, a region that benefits from excellent levels of untapped solar irradiation. Solar PV technology has seen dramatic cost reductions over the past decade combined with efficiency innovations, leading to pricing levels that have reached even less than 50% of conventional power costs (e.g. coal and gas). Furthermore, solar PV (and Wind in certain regions) is also reaching cost levels that are half the cost of conventional hydro power. These changes are leading to increasing investment in solar energy to displace conventional power.
Atlas Renewable Energy’s ‘Javiera’ solar plant in the Antofagasta region of northern Chile has set a prime example of this trend towards renewable energy in mining. The 69 MW PV plant provides power to Minera Los Pelambres copper mine, owned by Antofagasta Minerals, the largest private mining company in Chile. This project serves nearly 15% of the mine’s power requirements 11.
The mining industry in Brazil, Colombia, Mexico, and Peru are also able to adopt a strategy of incorporating non-conventional renewable energy into their processes. By doing so, apart from sourcing power at half the cost of conventional power, it will serve to enhance their environmental credentials, enabling business opportunities with organizations that value environmentally sustainable footprints. Technology companies, who rely on the minerals in Latin America to make their products, are eager to achieve carbon reduction measures 2, and will increasingly demand this from their suppliers.
It is predicted that renewable sources will account for 5%-8% of the global mining industries power consumption by 2022, with more ambitious targets aiming for 15% penetration in that same time period1. This drive towards renewables will lead to a tripling of global capacity in this market by 202712.
Incorporating solar energy offers a unique opportunity for Latin American mining companies to meet their energy needs in a sustainable, reliable, and cost-effective way. Solar is no longer just about being sustainable it’s a way for mining companies to stay competitive in an industry where cost reductions are critical.
- Slavin, Andrew. “Mining Industry Starts to Dig Renewables.” Energy and Mines, 7 June 2016, www.energyandmines.com/2016/06/mining-industry-starts-to-dig-renewables/.
- Bhattar, Payal. “Latin American Mining: Switching to Renewables.” Latin American Mining Switching to Renewables, 25 July 2018, www.wartsila.com/twentyfour7/energy/latin-american-mining-switching-to-renewables.
- Sanderson, Henry. “Miners Turn to Green Power Options.” Financial Times, Financial Times, 3 Oct. 2018, www.ft.com/content/b3b7fe4a-a5fc-11e8-a1b6-f368d365bf0e.
- Dickerson, Kelly. “How Gold Is Destroying Peru’s Rainforests.” Business Insider, Business Insider, 1 Nov. 2013, www.businessinsider.com/gold-mining-destroying-peruvian-amazon-2013-10.
- Gleeson, Daniel. “Miners Moving towards the Renewable Energy Path, Says Fitch Solutions.” International Mining, 11 Sept. 2018, www.im-mining.com/2018/09/11/miners-moving-towards-renewable-energy-path-says-fitch-solutions.
- “The Role of Generators in Mining Chilean Copper.” New & Used Generators, Ends and Engines | Houston, TX | Worldwide Power Products, www.wpowerproducts.com/news/the-role-of-generators-in-mining-chilean-copper/.
- Plumber, Bran and Popovish, Nadja. “These Countries Have Prices on Carbon. Are They Working?” The New York Times, The New York Times, 2 April 2019, www.nytimes.com/interactive/2019/04/02/climate/pricing-carbon-emissions.html.
- Viscidi, Lisa, and Ariel Yépez. “The Energy Solution Latin America Needs.” The New York Times, The New York Times, 1 Feb. 2018, www.nytimes.com/2018/02/01/opinion/energy-grid-latin-america.html.
- “Solar Energy in Latin America: Four Key Impact Drivers.” Targray, 14 Feb. 2019, www.targray.com/articles/solar-energy-latin-america.
- Molina, Pilar Sánchez. “Colombia Issues Regulation for Distributed Solar Generation.” Pv Magazine International, 5 Mar. 2018, www.pv-magazine.com/2018/03/05/colombia-issues-regulation-for-solar-distributed-generation.
- Bellini, Emiliano. “Antofagasta Minerals Sells Stake in 69.5 MW PV Plant in Chile.” Pv Magazine International, 31 May 2017, www.pv-magazine.com/2017/05/31/antofagasta-minerals-sells-stake-in-69-5-mw-pv-plant-in-chile/
- Funicello-Paul, Lindsay. “Press Release | Renewable Energy in the Mining Industry.” Press Release | Renewable Energy in the Mining Industry, 27 Feb. 2019, www.navigantresearch.com/news-and-views/annual-revenue-for-renewables-and-energy-storage-in-the-mining-sector-is-expected-to-generate-roughl.