While the Australian Coalition Government and the rest of us try to understand what the Palmer United Party is going to do and what the future of carbon management might be, Australian miners are simply getting on with the job. As the world’s governments work out how to deal with climate change and “the best approach to respond to it”, as usual mining companies have pragmatically recognised that a smaller carbon footprint makes business sense.
A core promise of the Australian Coalition Government (elected in September 2013) was the repeal of the carbon tax introduced by the former Labor Government in 2012. The legislation to effect that repeal was voted down by the current upper house on 20 March 2014. The repeal of the carbon tax is now contingent on the Coalition Government obtaining the support of the populist Palmer United Party (established by Australian billionaire Clive Palmer) which has prevaricated almost daily on whether it will support the repeal legislation.
With or without a carbon tax, remote mines in Australia face rising energy costs. Transporting diesel to remote locations is expensive as well as dangerous and subject to variable weather conditions. With the end of the commodities boom, Australian miners’ focus on reducing energy costs has reached a tipping point. The emerging realisation is that solar can offer a viable economic alternative while at the same time reducing a mine’s carbon footprint.
In an Australian first, Rio Tinto is deploying a 6.7MW PV off-grid solar plant at its Weipa bauxite mine. The Weipa mine, located on Cape York Peninsula at the very northern tip of eastern Australia, relies on costly diesel being shipped in to power the mine. The first phase of the solar project is expected to reduce daytime diesel demand from the mine’s 26MW generator by up to 20%. The addition of more solar and storage to balance out intermittency, could completely replace daytime diesel consumption at certain times.
The Rio solar plant is the first project of its type and scale in the world and has the potential to unleash billions of dollars of similar investment. It has been suggested that some 1000 MW-plus in market opportunities for displacing diesel off-grid electricity exist. Fortescue Metals recently tendered for a 3MW solar PV project to help power its Christmas Creek mining camp at its Cloudbreak iron ore mine in the Pilbara. In 2012 Cronimet Mining AG commissioned a 1MW intelligent hybrid solar system at a chrome mine in South Africa followed by the Chilean mining group MET (part of Antofagasta Minerals, the country’s fourth largest copper producer) who inaugurated a 10MW solar thermal plant at its copper mine in the Atacama Desert.
While the repeal of the carbon tax and the Government funds supporting alternative renewable energy sources may slow the progress of off-grid solutions, it will not ultimately be a showstopper. In the end, the economics are just too compelling. Energy is one of the biggest costs of running a mine.
Whether the G20 includes climate change on the agenda and irrespective of the outcomes in Paris 2015, mining companies are seizing the opportunity to transform the economics of their business by replacing volatile energy costs with one that is fixed for the life of the project. Miners have led the world with triple bottom lining, and the shift to renewable energy is a natural fit with their business, sustainability and social licence goals – with or without a political solution.
This article was originally appeared online in Mining, People and the Environment.