Energy and Mines Magazine Issue 14

Issue

THE RACE FOR GREEN MILESTONES

14

October

2019

The ambitious plans of B2Gold, NMG and Newmont Goldcorp

photo courtesy ABB

RAMPING UP MINE SITE DECARBONIZATION The drivers and pathways for low-carbon mining

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(photo courtesy NMG)

projects

The race for green milestones MELODIE MICHEL Reporter, Energy and Mines

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ver the past few years, the mining sector’s transition towards carbon-neutral power and fleet options has been ramping up.

This is due to both a stronger focus on climate change in global politics and business, and the growth and maturity of the renewables sector, which has pushed down prices and increased efficiencies. Renewables are no longer considered “alternative energy” — they have become a viable option to consider on all mine sites, one that developers cannot afford to overlook in their economic feasibility studies.

In this article, we explore the ambitious milestones set by three different miners: the construction of the largest off-grid hybrid solar plant on B2Gold’s Fekola Mine in Mali; the development of the first 100% electric open-pit mine at Matawinie by Nouveau Monde Graphite; and the full electrification of the underground Borden Mine by Newmont Goldcorp. Through these examples, two trends are emerging that could determine the future of the global mining sector: in remote mines, solar and battery technology are shifting the power paradigm, while in grid-connected sites, the 100% electric mine is close to becoming a reality.

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Leveraging solar efficiency at Fekola

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n August 2019, B2Gold announced its intention to build a 30 MW solar plant at its Fekola mine site in Mali. Energy from the plant will be added to the 60 MW of heavy fuel oil (HFO) capacity already on site, and a 3.5MWh battery storage facility will be added for more efficiency.

The US$38mn project is expected to be completed by the third quarter of 2020 and will save B2Gold over 13 million litres of fuel per year, with a four-year payback period.

Dennis Stansbury, Senior Vice President of Engineering and Project Evaluations at B2Gold, explains that the drop in solar panel and battery costs was what made this project so economically viable. «A plant like this three or four years ago would have had a 10-year payback.” With all fuel coming by road from the Port of Dakar over 1,000km away, logistics was an important factor in the decision to build the solar facility on site.

“We’ll save 2.5 to 3 cents per KWh on our power, which will create about a 7% decrease in our process operating costs, since power is a very high percentage of those. We’ll be producing over 63,000MWh of power per year, and the CO2 savings are close to 39,000 tonnes per year. So it’s a very good thing to do both environmentally and economically,” Stansbury adds.

This is the second solar plant that B2Gold has installed on its facilities, after the 7 MW plant built at the Otjikoto mine in Namibia. Though much smaller than the Fekola project, the Otjikoto plant already provides 13% of the energy consumed at the mine, and saved B2Gold 2.4 million litres of fuel in 2018.

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B2Gold Fekola Mine

(courtesy B2Gold)

The company has opted to build both plants in-house, instead of using Engineering, Procurement, Construction and Maintenance (EPCM) contracts or power purchase agreements. According to Stansbury, this doesn’t necessarily save any money, but it does make projects more efficient. “When we build our own processing plants, they come up on time and within budget, and the ramp-up to full production is achieved in weeks, not months. We also control the manpower, and after building a plant we already have trained operators: the people 5

who built it become the people operating and maintaining it, which is an enormous advantage,” he explains. Still, B2Gold will be upgrading its recruitment criteria and looking for people with electrical engineering degrees to work on the plant, in order to ensure maximum operating efficiency.

“We’ll be producing over 63,000MWh of power per year, and the CO2 savings are close to 39,000 tonnes per year. So it’s a very good thing to do both environmentally and economically” DENNIS STANSBURY Senior Vice President of Engineering and Project Evaluations at B2Gold 6

This is the second solar plant that B2Gold has installed on its facilities. Though much smaller than the Fekola project, the Otjikoto plant already provides 13% of the energy consumed at the mine, and saved B2Gold 2.4 million litres of fuel in 2018.

Of course, building a solar plant as a mining operator also comes with its challenges, most notably in terms of procurement: while 30 MW of solar capacity is not small, it pales in comparison to the 500 MW mega solar projects being built in India or China.

As a result, B2Gold has chosen to team up with Suntrace and its partner BayWa to ensure orders are delivered on time.

“BayWa is involved in purchasing a lot of solar power each year, so we’re using a bit of their clout to make sure that our orders don’t get set aside for a much bigger solar plant somewhere else,” Stansbury says.

For him, solar is becoming the obvious choice for mining operators looking for cheap off-grid power: pricing is already at a competitive level, and the technology is improving daily, with panels performing well even in West Africa’s infamous dust storms. The recent State of Play: Strategy survey of global miners seems to confirm that opinion: in it, 78% of Australian mining executives said they believe that renewable and solar energy will eventually become “the most widely used energy source in the industry”.

Stansbury adds: “Solar is going to keep booming. Solar power is close to free once it’s up and running: to give you an idea, the cost for our HFO power at Fekola right now is around 16 cents per kWh; once the solar plant is online [and capital costs have been amortised], the cost for that power will be less than one cent per kWh for operations and maintenance. There’s no comparison once you got it there.”

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(photo courtesy NMG)

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Borden Mine

(courtesy Newmont Goldcorp)

Borden mine project: saving power costs by going electric 8

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t sounds counterintuitive, but according to Maarten van Koppen, Energy and Sustainability Manager at Newmont Goldcorp, using an all-electric fleet in the underground operations of this new Ontario mine will save Newmont Goldcorp a lot of electricity. “In most jurisdictions, you have to ventilate for air quality to provide a healthy work environment. So, if you don’t have any diesel exhaust gases, your air quality drastically improves. On the main ventilation, we’ve ENERGY AND MINES MAGAZINE

reduced energy use by about half compared to a diesel fleet, and on the secondary ventilation, the savings are even larger. And of course, if you don’t ventilate as much, you also save on fans and ventilation tubes… it’s a bit of a ripple effect and there are a lot of savings,” he explains.

Newmont Goldcorp announced its intention to make Borden an all-electric mine back in 2016.

Three years later, production has started and is being ramped up to reach commercial production levels later this year. The decision to go electric aligns with stakeholder expectations that the mine “remain invisible”, according to van Koppen. Since the mine is located very close to a lake enjoyed by the local community, the company wanted to remain as discreet as possible, and with low noise pollution, an electric fleet is as discreet as can be.

But finding the business case was not as straightforward. “It seems so evident when we talk about it now, but we went through a bit of an evolution trying to find out what the business case was,” recalls van Koppen. “The first step was fuel savings on the vehicles themselves, then the next stage was to save on heating fuel, and ventilation is where we ended up seeing the biggest cost savings.” He adds that going electric had knock-on effects: a fully diesel mine would have required more power than the site’s existing and planned additional grid connections could provide. “We are limited in the amount of electricity that we can get from the grid there. So by going electric and setting up our mine as an energy-efficient place, we could avoid very costly and time-consuming permits, a transformer station and transmission lines. When we added all of these things up, 9

it made the business case for going electric,” he says.

“We are limited in the amount of electricity that we can get from the grid there. So by going electric and setting up our mine as an energyefficient place, we could avoid very costly and time-consuming permits, a transformer station and transmission lines.”

MAARTEN VAN KOPPEN Energy and Sustainability Manager at Newmont Goldcorp

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Newmont Goldcorp announced its intention to make Borden an allelectric mine back in 2016.

Three years later, production has started and is being ramped up to reach commercial production levels later this year.

Being a first-mover in the electrification of mine sites can be a challenge: when Newmont Goldcorp embarked on this adventure, there was no commercial electric mining equipment readily available. “We had to challenge the original equipment manufacturers (OEM) to supply electric equipment.

Some of them had already started designing battery-electric equipment, and we found two good partners in McLean Engineering and Sandvik Mining that supply our equipment now, and it’s working very well. Of course there are a lot of issues that come with introducing new equipment, but working together with the OEMs we’re able to overcome those,” adds van Koppen.

One of the issues the company encountered had to do with the harmonics generated by the variable frequency drives installed for fans, pumps and other equipment. “We suspected and allowed for harmonic filters, though we knew we had to field adjust once installation was completed” he says. Some of the chargers on the equipment didn’t respond very well to these harmonics, and Newmont Goldcorp had to go through a trial-and-error process to reprogram or swap these chargers. “This is the kind of hiccup you only find out once you are in operation,” he notes.

And while the company is also looking at integrating solar energy on some of its remote sites, van Koppen believes 100% electric mines will be the first milestone to be reached in the industry. “We are looking to go fully electric at Borden at least for the underground portion, and I know that other players are looking to do the same thing. It will be a bit of a race to see who can get there first,” he says.

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(photo courtesy NMG)

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Electrification as a win-win for Matawinie

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ouveau Monde Graphite is planning to build the world’s first 100% electric open-pit mine in Quebec — a somewhat natural decision, given that graphite is one of the main elements used in lithium-ion batteries for electric vehicles.

“We first looked at where would could sell this graphite, and then we asked our engineers to look at the option of using electric trucks on the project and realized it was possible to use the very technology we sell to. For us it’s a win-win on all levels, so we thought: ‘if we don’t do it, no one will’,” says Eric Desaulniers, the firm’s CEO. Being hooked to the Hydro Quebec grid was a significant advantage: the company already has access to 12 MW through the existing line, and is building extra connections to bring the 200 MW needed for the project without disturbing the supply for surrounding communities.

But, as was the case for Newmont Goldcorp’s Borden Mine, the issue is in finding the right electric equipment for the site. Desaulniers explains: “The challenge is to convince the OEMs that this is the mine of the future and they need to move as quickly as possible. For them, this is hurting the business: they would much prefer to keep selling their existing products. We need to convince them that they need to move quicker than their competitors in order to secure market share.”

The firm is looking at different options, not just for electric vehicles, but also cable electric solutions readily available for drilling or digging. They will also need to find the appropriate software solutions 12

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(photo courtesy NMG)

to handle the operations of an all-electric mine. “We need to design processes with charging times in mind. The challenges are different for a battery-powered mine, so we will be visiting different all-electric operations in the next few weeks to find out what they are using in terms of mine management,” adds Desaulniers.

Nouveau Monde Graphite is targeting commercial production by 2022, so it’s going to be a busy couple of years — but the company is 13

(photo courtesy NMG)

“We are confident that the hauling trucks and a lot of the equipment will be all electric, but there may be some parts that will be more difficult to start with. Still, by 2025 everything will be electric” DAVID LYON Director of Electrification and Automation, NMG 14

confident it will eventually find all the equipment it needs to be fully electric.

“We really want to be all-electric on Day 1, but there’s still a lot of work to be done,” says David Lyon, Director of Electrification and Automation. “So we’re looking at the bridging technologies that exist. We are confident that the hauling trucks and a lot of the equipment will be all electric, but there may be some parts that will be more difficult to start with. Still, by 2025 everything will be electric.”

The benefits will be tremendous: no fuel expenses, low maintenance costs, regenerative braking, and peak shaving on grid power prices through battery storage.

Once it’s all in place, the benefits will be tremendous: no fuel expenses, low maintenance costs, regenerative braking that will allow the trucks to charge more energy downhill than they use uphill, and peak shaving on grid power prices through battery storage. For the team at Nouveau Monde, every new mine should put all-electric operations on the table. “Sometimes it can be more difficult if the mine is remote, they may have to build their own electricity source (a solar power plant for example), but in the end it could still be cheaper for the mine. Everyone needs to make the effort to look at the technology out there and consider an all-electric mine,” urges Desaulniers.

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(photo courtesy NMG)

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Two of our operations are located in remote northern areas and do not have access to grid electricity. Their energy costs and carbon footprint are high, and we would like to find solutions to meet their energy needs and reduce our emissions.�

Our operations are all connected to electrical grids, so we are tracking cost-effective alternatives to either grid supply or 3rd party dedicated supply of lower GHG intensity energy.�

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Using renewable energy already and looking to install more at our mines” In Ontario, we would like to transition from diesel underground equipment to electric equipment.”

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Ramping up mine site decarbonization THE DRIVERS AND PATHWAYS MELODIE MICHEL Reporter, Energy and Mines

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ecarbonization, the reduction, removal or offsetting of CO2 emissions, has become a strategic priority for mining majors. Most are on track to meet their 2020 targets and have started looking at the 2050 horizon, in line with the Paris Agreement’s ambition to keep global warming below 2°C by 2100. In February, Rio Tinto published its first climate change report, following guidelines by the Task Force for Climate-Related Financial Disclosures (TCFD). It revealed that the company is on track to deliver its target of 24% emissions reduction by 2020. Anglo American has set 2030 targets to reduce absolute GHG emissions by 30% and is on track to achieve its 2020 targets of an 8% improvement in energy use and a 22% saving in GHG emissions. And last year, BHP set the long-term goal of achieving net-zero scope 1 and 2 emissions in the second half of this century, meaning it will no longer produce CO2 in its operations or through the power it purchases.

A myriad of other clean energy, power efficiency, and electrification projects have also recently been announced: Antofagasta and Anglo American have both signed power purchase agreements (PPAs) to power Chilean mines with 100% renewable energy; DeBeers is also looking at using 100% renewables for its Chidliak project and is testing ways to store emissions at its Gahcho Kué mine in Canada; and both Koppar Resources and Nouveau Monde Graphite are planning new zero-carbon mines — and this is all on top of the many hybrid power plants being built at mines around the world.

So what is driving this push for low-carbon mining? John O’Brien, a partner in Deloitte’s financial advisory arm, believes that there are three factors: “Government and social expectations are moving quite rapidly, which is important as a context, but not enough. Technology is getting cheaper and cheaper: in a lot of projects the company actually ends up saving money, even if the capital investment is higher.

But the area that in my mind has absolutely changed everything is the TCFD disclosures,” he explains.

The TCFD recommendations came out in 2017 and, though these disclosures are not compulsory, they have been widely adopted by the investor community, and consequently, by any large company that receives money from that community. “Big listed companies, 18

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photo courtesy Anglo American

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particularly multinationals, have no choice but to address what their climate risks are, and once you’ve told people what your climate risks are, you need to be seen to be doing something about it,” says O’Brien.

Not only are climate risks increasingly seen as financial risks, but miners are also realizing that there may soon be a competitive advantage in producing carbon-neutral metals: end customers are more conscious of the environmental impacts of their purchases, and some large buyers such as Apple have already started asking for green copper and aluminum.

Power for the mine: less and cleaner Decarbonization can imply many things on a mine site, but for the majority of companies, it starts with the type of energy used to power operations. Rio Tinto’s climate change report showed that 90% of the group’s 32 million tonnes of carbon dioxide equivalent (CO2-e) emissions in 2016 came from the energy it uses. Turning to clean energy sources would, therefore, cut emissions drastically.

“Big listed companies, particularly multinationals, have no choice but to address what their climate risks are and once you’ve told people what your climate risks are, you need to be seen to be doing something about it” JOHN O’BRIEN Partner, Financial Advisory, Deloitte 20

Luckily, this is also the easiest transition to make: in many cases, miners don’t even have to invest in a wind or solar plant themselves, and can simply sign a PPA with a renewables operator. Take-up of this solution is booming: in 2018, corporates of all sectors purchased 13.4 GW of clean energy through long-term contracts, more than double the 2017 amount. And according to the International Renewable Energy Agency (IRENA), the materials sector consumes the largest share of this renewable power at 60%. “On average, about 13% of the total electricity consumed by companies in the materials sector came from renewable sources, amounting in 2016 to 165 TWh of renewable electricity,” IRENA says in its 2018 Corporate sourcing of renewables report, citing Rio Tinto, South32 and Vale as the largest consumers, and adding that 30% of the clean energy used in the sector came from PPAs. The other way miners are cleaning up their power sources is by building their own renewable production capacity on-site. There too, the amount of capacity installed is rapidly increasing: B2Gold, for example, started by installing 7 MW of solar capacity at its Otjikoto Mine in Namibia, and based on the success of this endeavor, has decided to ENERGY AND MINES MAGAZINE

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build a 30 MW solar plant at the Fekola Mine in Mali. Resolute Mining also announced a joint development agreement with Ignite Energy Projects at the end of last year for the development of a new 40 MW independent solar hybrid power plant at the Syama gold mine in Mali.

At the Energy and Mines Australia Summit this past June, Gold Fields announced the construction of an 18 MW wind farm, a 4 MW solar farm and a 13 MW battery storage facility, alongside a 16 MW gas engine power station at the Agnew Gold Mine — which is expected to bring renewable penetration upwards of 50% over the long term.

Globally, almost 1.2 GW of renewable energy has been installed at mine sites so far, with another 1 GW in the pipeline, according to the Rocky Mountain Institute (RMI). The mining sector’s clean energy transition is well underway, and with solar, wind and battery equipment prices continuing to decrease, it is only going to intensify.

On top of switching energy sources, miners are also looking for ways to reduce their energy use. Jonathan Dunn, head of international policy and planning at Anglo American, explains: “Two of the main areas where we focus on reducing our carbon footprint are comminution power consumption in South Africa and methane capture at our Moranbah North and Capcoal underground operations in Australia.

In both areas, we have implemented business improvements and productivity initiatives that have resulted in a substantial portion of energy reduction.”

Anglo American has also piloted plant trials for its Shock Break technology that allows for savings in comminution power consumption, reducing the need for crushing and grinding, and therefore significantly cutting the energy requirement.

Electrification of material movement: the production bottleneck The second-largest percentage of carbon emissions in the mining sector comes from material movement, including heavy haulage and other mobile mining equipment. BHP, for example, estimates that 35% of its operational emissions come from this part of the business.

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As a result, the sector has now started investing in the electrification of that equipment.

Anglo American is working on an innovative solution to power haul trucks by hydrogen using solar panels. “By oversizing the photovoltaic generation capacity at a site, we would be able to capture enough hydrogen to potentially power a haul truck, which will help create a smart energy mix that allows us to become carbon-neutral. Our aim is to get, hopefully, in the next 12 months, a truck running around using hydrogen,” says Dunn.

Kirkland Lake Gold was one of the first miners to introduce electric haul trucks at the Macassa Mine in Ontario in 2012. At the time, the capital investment required was even higher than today, but savings achieved on operating costs and on the capital that would have been required to ventilate at the depth of the operations (around 5,700 feet), more than offset the initial investment. Today, 80% of underground operations at the site are performed by battery-electric vehicles, and the mine has achieved some of the lowest carbon intensity in the world of gold mining, at 48kg of CO2-e per ounce of gold.

“Our aim is to get, hopefully, in the next 12 months, a truck running around using hydrogen,” JONATHAN DUNN Head of International Policy and Planning, Anglo American 24

And while electric trucks are still up to three times more expensive than diesel trucks, the benefits achieved at Macassa are such that Kirkland Lake Gold is now looking to implement mobile equipment electrification at other sites. In this expansion, the company sees the limited supply of electric trucks on the market, as well as the longer delivery times required, as challenges to overcome. These are common concerns for those looking at electrification: they were mentioned by both Nouveau Monde Graphite and Newmont Goldcorp in the latest issue of Energy and Mines Magazine.

Wayne McChristie, Kirkland Lake Gold’s energy manager, explains: “The introduction of battery-powered haul trucks has been a real success story at Macassa. We have learned a lot as we have progressed.

We know that it takes considerable time for electric equipment to go from prototype to full production, and we need to plan for that when updating our fleet. We have also learned that the commitment of the manufacturer is critical, given that they often need to make adjustments along the way.”

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Electric truck production seems to be ramping up: for instance, Komatsu already offers nine models, and German company Kuhn Schweiz just unveiled the ElektroDumper, the world’s largest electric vehicle with a 5-tonne battery pack. Other relative newcomers are also looking to capitalize on demand. In 2016, ETF Mining Trucks developed a modular 240-tonne mining haul vehicle, with about €25mn of investment — half of which came from large mining companies.

The truck offers gains of about 40 to 50% on the price per ton/km, based on a pilot conducted with a Canadian major mining company.

Geoffrey Ejzenberg, the firm’s chief client officer, explains: “On top of not having to purchase fuel, there are a few drivers for this price drop: we have five axles with four wheels on every axle, so every wheel is independently driven, steered and suspended. We have electric motors on every wheel that are independently driven, which means that none of the wheels will slip. You can put more power into the wheels with better grip and function, resulting in faster cycle times so you can effectively haul more than twice the volume of traditional trucks.”

According to him, ETF will be starting its latest development investment program in Q2 2020 with a 30 to 36-month development time, so these trucks should be running commercially on mines by 2023.

In the next five years, finding electric hauling trucks should no longer be so difficult for miners looking to electrify their fleets.

Automation and the battery question In terms of working conditions, battery-haul trucks are preferred by the Kirkland Lake Gold’s operators. According to McChristie, “battery trucks are cleaner, quieter, have less vibration and our people clearly like using them.”

According to Michel Serres, North America electrification and automation segment manager at ABB, comfort of use is one of three main benefits that electrification brings to a mine site. “Once an operator starts using electrical equipment, they do not want to go back to diesel, and people are the most important thing,” he says.

“Additionally, when looking at electricity price feasibility, you’re able 26

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to make projections for the next ten years, whereas diesel prices are more volatile and unpredictable. Finally, when you have an energy company selling you electricity, you don’t have to store it. Diesel storage can be a real headache for mines. This all plays into the viability of an electrification project.”

Still, he warns that using battery-electric mobile equipment comes with limitations: trucks have to be charged every few hours, which means that the distance between trucks and charging stations have to be minimized. “This means that mining superintendents might need to re-think the way they plan everyday work. You have to revisit the way you have been mixing machines, people and technology to take into consideration the requirements and related benefits you will have from getting a clean energy fleet,” he says. ABB recently developed a trolley assist solution for Arctic climates, which is expected to help Swedish company Boliden cut GHG emissions by 80% at the Aitik Mine.

With electrification often comes automation, meaning that operators can be removed from truck cabins and placed in control rooms.

Kirkland Lake Gold, for example, already runs trucks tele-remotely between shifts at Macassa, to cover for the two hours it takes for staff to change.

“The introduction of batterypowered haul trucks has been a real success story at Macassa.

We have learned a lot as we have progressed.”

WAYNE MCCHRISTIE Energy Manager, Kirkland Lake Gold 28

At ABB, Serres warns: “Autonomy may solve some of the human acceptance issues, but it may be difficult to bring both changes at the same time. For a crew that has been doing things in the same way for the past 35 years, it will take some time to fully embrace change. This is no different than in any other work environment.”

Among the other issues that electrification brings to the mining sector, it’s important to remember that batteries have a limited life, after which they need to be disposed of. Kirkland Lake Gold is working with another company and the provincial government in Ontario to take the batteries that come up from the first mobile equipment installed at Macassa, which can no longer perform the work cycle and turn them into GHG saving equipment or energy storage. “We need to think of where we’ll be in another 10 to 15 years if the electrification of mobile equipment continues worldwide, and what this is going to involve in terms of used batteries,” says McChristie.

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Next decarbonization frontiers

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hile the mining sector must continue to reduce carbon emissions from its two largest culprits (energy use and mobile equipment), many other avenues remain to be explored. John Megannon, executive vice-president at MineRP, a mining management software solution, explains that carbon management has so far been approached at an aggregated level.

“Mines are not managing carbon at a detailed level, they’re not even reporting and tracking carbon at a granular level where carbon impact is induced,” he says. “It’s not just about energy consumption: it’s also about the carbon footprint of every bolt and cable that you use on the mine: that’s your actual carbon consumption.”

He believes that once mining companies get a handle on the way carbon is involved in their operations at a granular level, carbon could become

an extra currency in their treasury system. This would be helped by carbon pricing at government level, which would effectively set the value for that currency across different countries and regions. “This could make a non-viable mining project in a high-carbon pricing region become

Recently, miners also started looking at their scope 3 emissions — those produced by their customers.

For years, scope 3 was seen as too difficult to tackle but in 2019, both BHP and Rio Tinto have started taking measures to deal with them. Rio Tinto signed a deal with its biggest

It’s not just about energy consumption: it’s also about the carbon footprint of every bolt and cable that you use on the mine: that’s your actual carbon consumption. viable by trading off the carbon with an operation in a low carbon-pricing region. You would handle the volatility of carbon pricing the same way you would handle multi-currency risk in any treasury system with any other currency. All currencies are subject to political volatility anyway,” he explains, adding that the industry doesn’t yet seem ready to manage carbon at this granular level.

Chinese iron ore customer, China Baowu Steel Group, to develop ways to reduce carbon emissions produced by the steelmaking process, while BHP is set to announce carbon reduction targets for its customers next year. The two announcements, made about two months apart, are evidence of the climate competition taking place between mining majors — great news for the planet.

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