Renewable Power for Mines

Transcription

1 Renewable Power for Mines Adding Value. Delivering Results. By Greg Smyth November 2015

2 Outline Understanding Miners Mines Power Needs Case Studies BC s Mines

3 Knight Piésold KP has a long history developing renewable power for mines:! Knight Piésold's first project built in MW Mulungushi project in Zambia for a mining company.! Involvement in over 300 hydro projects worldwide, many of which were for mining Clients. 3

4 Knight Piésold and Legacy Power Renewable Power for Mines also provides:! Cost effective & reliable power.! Ability to afford mining of lower grade ore and thereby extending the mines life.! Legacy Assets.! Assist the mine with its Social License. Company Name Presentation Title 4

5 Understanding Miners

6 Understanding Miners Timelines and Costs! Timelines: Mine Life is typically Years. A source of lower cost energy could extend the mine life and allow mining of lower grade ore.! Costs: Power is typically viewed as an Operating Cost (i.e. Diesel or Grid Power). For remote precious metal mines, power typically accounts for more than 20% of the operating cost of the mining operations. Knight Piésold Power for Mines 6

7 Understanding Miners Upfront Costs Versus Operating Cots How to sell higher initial Capital Cost Renewable Power to a Miner?! It is like trying to sell the mine a more expensive electric car, that will never need charging, versus a cheaper fossil fuel car that uses expensive fossil fuel. Knight Piésold Power for Mines 7

8 Mines Power Needs

9 Understanding Mines Mines Power Needs! Power Requirements vary dramatically depending on type and size of mine.! Hard Rock mines: Major load is crushing and grinding circuit. Total load approximately 1.5 MW/1,000 tpd. Additional power needed if underground mine. Typical small gold mine: 6,000 tpd 9 MW. Typical large copper mine: 120,000 tpd 180 MW.! Heap Leach Operations: Much lower power requirement: 3 5 MW.! Candidates for renewable power are more likely to be remote precious metals mines. Knight Piésold Power for Mines 9

10 Economic! Cost of Fuel: $1.20/L $1.20/L = $4.50/USGal $1.20/L = $0.34/kWh! Mine Example: Mine Power Requirement: 15 MW; 130 GWh/yr 15 year mine life Annual Cost of Electricity (100% Diesel) = US$ 45 million 15 MW Run-of-River Project Capital Cost: US$ 60 million, Operating Cost: < US$1 million/yr Mean Annual Energy: 100 GWh (Capacity Factor = 76%) Knight Piésold Power for Mines 10

11 Economics Hydro vs. Diesel: Simple Cash Flow analysis Knight Piésold Power for Mines 11

12 Case Study 1 - DRC

13 Case Study 1 Democratic Republic of Congo Remote Gold Mines! Potential Gold District in DRC, > 5 million oz resource! 4 potential mines, 6 MW per mine required initially! No spare capacity on grid, the 1st of the four mines are spending $20 million a year on diesel Knight Piésold Power for Mines 13

14 Case Study 1 - DRC Remote Gold Mines! First 6 MW hydro facility will replace 96% of this diesel requirement.! 2.5 year Payback versus diesel operating costs! Development Options: Mine build s it themselves IPP Partner or IPP Power Purchase Agreement Phased development! Mining company has established a Foundation: Health clinics, schools, community centre, water supply Local communities to be connected to local grid Connection to regional grid after mine closures Knight Piésold Power for Mines 14

15 Case Study 2 Canadian Artic

16 Case Study 2 - Canada Remote Iron Ore Mine Canadian Arctic! Nunavut Mine 30 MW of on site diesel generation is currently the base case for the mine Feasibility.! Could be offset by 100% renewable (storage hydro and wind) at a significantly reduced cost. Knight Piésold Power for Mines 16

17 Case Study 2 - Canada Remote Iron Ore Mine Canadian Arctic! Two renewable energy options assessed: 30 MW Storage Hydro (80% Capacity Factor) 30 MW Hydro + 30 MW Wind (100% of mines electric power requirements)! When compared to onsite diesel generation costs: 5-year payback IRR > 20% Very attractive for a mine with a mine-life of between years. Knight Piésold Power for Mines 17

18 BC s Mines Potential!!!! Operating Proposed Permitted Remote

19 Summary

20 Summary Renewable Power for Mines! Remote hydro, wind and solar projects are, cost competitive, environmentally sustainable and provide an extremely attractive alternative to diesel generated power.! Once the renewable energy asset is paid off, it allows the mine to operate at a much lower cost, thereby potentially extending the life of the mine.! The hydropower project will be in service long after mining ceases and will be a Legacy Asset power supply for on-going development of the local area.! A renewable energy project, developed in partnership with the local communities, can help the mine with its Social License to operate. Knight Piésold Power for Mines 20

21 Summary Renewable Power for Mines! Miners are passionate about mining, not power generation or developing renewable power projects.! This provides a huge opportunity for Renewable Energy Developers to export their know-how and develop profitable Legacy renewable energy developments around the world. Knight Piésold Power for Mines 21

22 THANK YOU Greg Smyth + 1 (604) gsmyth@knightpiesold.com