Energy and Mines Magazine Issue 30

Australian miners moving the dial for decarbonisation Wind and solar mapping for mines

Issue

30 May

2021

Lessons learned from Fekola mine solar project African Gold Group and Syrah Resources on renewables for African mines.

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Australian miners moving the dial for decarbonisation MELODIE MICHEL REPORTER Energy and Mines

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ow that renewable energy is decidedly cheaper than fossil fuels for generating electricity in remote conditions, Australian miners are eyeing 100% clean base load generation and the electrification of fleets.

Australia is blessed when it comes to renewables: according to Geoscience Australia, the country receives no less than 10,000 times its total energy consumption in solar radiation every year. It also enjoys strong wind resources, with current installed capacity covering about 10% of its energy needs, and many new projects in the pipeline. With this in mind, it is no wonder that renewable energy has become the cheapest form of power generation in Australia.

Gold Fields, which recently had to increase power capacity at the Gruyere Mine for expansion plans, knows this first hand. “We are planning an almost 30% increase in throughput, and we need to support that with additional power. Our options were either to commit to additional gas pipeline capacity or to add solar. The solar option proved to be the lower-cost option, so what we can say is that it is cheaper on remote mine sites to invest

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“We are planning an almost 30% increase in throughput, and we need to support that with additional power.”

JAMES KOERTING ENERGY MANAGER

GOLD FIELDS

in renewables. We’ve proven that now,” says James Koerting, Manager, Energy, Australasia at Gold Fields.

The expansion is currently underway, and will involve the addition of a 4 MW gas engine, a 13 MW solar farm and a 4.4 MW battery storage system, resulting in about 10% renewable penetration in the overall power plant.

This is notably less ambitious than Gold Fields’ Agnew project, for instance, which is sourcing 54% of its energy needs on average from renewable sources. Koerting explains that this is due to existing contract structures that limited the project’s flexibility.

“Agnew was a greenfield project whereas Gruyere was an addition to an existing power station. Because we have existing assets that we’ve invested in, we need to get a return on those; we can’t just commit to different renewables without driving up the costs generally,” he notes, adding that there may be opportunities to 4

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increase the renewable capacity at Gruyere in the future.

“Energy storage is still

Meanwhile, the company is looking at increasing the renewable penetration at Agnew by storing curtailed energy, and potentially adding more solar capacity. “Energy storage is still quite expensive but I’m doing some modelling at the moment just to understand the applications, where it’s going to work for us,” Koerting says. Lithium and other chemistry batteries, flow batteries, gravity storage systems and thermal storage are all being considered, but the company doesn’t have a timeline in mind for their installation.

quite expensive but I’m doing some modelling at the moment just to understand the applications, where it’s going to work for us.”

That’s not the case at GMA Garnet’s Port Gregory Mine, also in Western Australia: there, the company is hoping to reach 100% renewable generation (up from 70% currently) within the next five years. “The biggest production source of our product globally is from Port Gregory so this is our opportunity to really move the

JAMES KOERTING ENERGY MANAGER

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“The biggest production source of our product globally is from Port Gregory so this is our opportunity to really move the dial and achieve our decarbonisation target.”

GRANT COX ACTING CEO AND CHIEF FINANCIAL OFFICER GMA GARNET

dial and achieve our decarbonisation target,” says Grant Cox, GMA Garnet’s Acting CEO and Chief Financial Officer.

Port Gregory has been operating with renewables since last year, with a hybrid plant developed by Advanced Energy Resources (AER) comprising of a 2.5 MW wind farm, a 1.1 MW solar farm and a 2 MW battery. Cox explains that the plant has been performing better than expected, and although the details of the expansion are still confidential, it will involve increasing the wind, solar and storage capacity to reach 100% renewable power. “I understand it would be a world first,” he notes.

ESG TARGETS GAINING GROUND The reasons for this ambition on the part of Australian miners are multiple. Aside from the drop in renewable and battery technology prices, there is a sense in the community that decarbonisation is no longer an option. “Particularly in base metals and battery minerals, mining companies globally are competing on the basis of whether those minerals are zero carbon or not. They expect a premium or better access to market based on those minerals being clean, and this is shaping how they think about their energy supply and electrification,” says Graeme Stanway, Founder and Chairman of State of Play. He adds that while ESG pressure from investors is a factor, even more pressure is coming from the market. “It’s going to be seen as a prerequisite,” he warns.

BHP was the first Australian miner to announce carbon targets in 2019, and it was shortly followed by Rio Tinto and Fortescue Metals Group (FMG). All three of them are listed companies that probably felt the pressure from environmentally conscious investors sooner than others. But these announcements had a ripple effect in the market, and now even private companies are

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ready to publicly set targets. “It’s starting to drive innovation and faster and faster uptake of renewables. These announcements are definitely having an effect. It’s not an easy transition but everybody is grasping the issue now,” notes Rob Wilson, Head of Western Australia at the Clean Energy Finance Corporation (CEFC).

“It’s starting to drive innovation and faster and faster uptake of renewables.

Both Gold Fields and GMA Garnet are currently working on their targets, hoping to announce them in the coming months. Cox explains that while GMA Garnet’s two shareholders have a keen interest in building a sustainable business, the bigger driver is customer expectations. “Part of our value proposition is that our product is a more environmentally sound alternative than coal and copper slags which are the main competitors in markets. The large part of our proposition is that you can recycle our product, so the work we’re doing on reducing carbon emissions helps add to that story in the value proposition,” he adds.

ROB WILSON HEAD OF WESTERN AUSTRALIA

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CLEAN ENERGY FINANCE CORPORATION (CEFC)

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“At the moment all of the evaluations are done on a commercial basis but that might change for a companymandated emission reduction target, and if that becomes the case, it might be a stronger focus.”

JAMES KOERTING ENERGY MANAGER

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At Gold Fields, Koerting explains that the setting of a public target would increase the company’s focus on decarbonisation. “At the moment all of the evaluations are done on a commercial basis but that might change for a company-mandated emission reduction target, and if that becomes the case, it might be a stronger focus,” he explains.

However, he notes that it may be more difficult for gold miners to set targets, because their mine lives tend to be shorter or less predictable than in iron ore. “We’ve got to start looking at what investments we can make that will not carry as much risk should the mine close early, and some of these are around redeployable solar and energy storage: we can make mine life asset purchases, and if the mine life doesn’t continue on then we’ll relocate,” he says.

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“We’re keen to get shorter-life mines using renewables as well, so we’re looking at redeployable options: redeployability is achievable at the smaller scale, and that’s starting to get real traction in the solar sector.”

ROB WILSON HEAD OF WESTERN AUSTRALIA CLEAN ENERGY FINANCE CORPORATION (CEFC)

Mine life is a known challenge when it comes to installing renewables, but miners and developers are using more and more innovative solutions to overcome it. At CEFC, Wilson believes renewable energy investments start making sense around a mine life of 10 years, but it is still possible to decarbonise shorter-term projects. “We’re keen to get shorter-life mines using renewables as well, so we’re looking at redeployable options: redeployability is achievable at the smaller scale, and that’s starting to get real traction in the solar sector,” he says.

But even wind technology can be made more affordable with a little creative thinking: the Port Gregory project, for instance, makes use of second-hand wind turbines imported from Europe — keeping costs down and reducing the project’s environmental impact even further.

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With increasingly ambitious targets and innovative solutions, projects aiming for 50% renewable energy and up are becoming the norm. In fact, most of the projects CEFC is currently looking at are around 70% to 90% renewable penetration. “We see our role as trying to drive new standards and trying to get the renewable energy penetration up, it’s going to become the new norm pretty quickly. Then, when we engage with a party, we try to get them to embrace an ethos around low carbon by aiming for full carbon neutrality, however long it may take,” Wilson explains.

ROAD TO ELECTRIFICATION While they work on increasing the renewable percentage in their power plants, Australian miners have also started to explore the decarbonisation of mobile fleets — namely through electrification. Since its launch earlier this year, the

Full list of recently announced projects in Australia Decarbonisation announcements can be hard to keep track of these days, so here is Energy and Mines’ curated list of Australia’s most recent projects.

OFF-GRID POWER • Abra Mining, WA: The Abra silver and lead mine, majority-owned by Galena Mining, is set to source renewable power for its operations through a 16year PPA with Contract Power. Under the terms of the agreement, Contract

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Power will build, own and operate a hybrid plant comprising of a 10 MW natural gas-fired power station, a 6 MW solar array and 2 MW of battery energy storage.

• Sandy Ridge Mine, WA: This open-pit kaolin mine is now functioning on 100%

renewable energy in the day time thanks to a 15-year solar and battery PPA with Hybrid Systems Australia.

The system includes a 2 MW diesel power station, 1.2 MW of solar and a 350 kWh lithium-ion battery.

• Coburn Mine, WA: Strandline Resources has

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Electric Mine Consortium has received strong interest: the 14 initial members — State of Play, Sandvik, Epiroc, OZ Minerals, South32, Gold Fields, Safescape, Dassault Systemes, Energy Vault, Hahn, Horizon Power, 3ME, IGO and Barminco — were joined recently by two more miners: Evolution Mining and Blackstone Minerals.

Stanway explains that the consortium’s focus is mainly on underground mobility, with storage, large equipment, light vehicles, electrical infrastructure and charging and mine design seen as key elements.

Underground electric mobile equipment is already in place in various Canadian mines, but none has been commercially deployed in Australia, though various pilot projects are underway. This is mostly due to the fact that mining conditions tend to be different, with steeper gradients in Australia than in signed a 15-year PPA with Contract Power to build a 32 MW hybrid gas and renewables plant at the Coburn mineral sands project.

• Lake Wells SOP: Australian Potash is running a tendering process for a renewable power solution at the Lake Wells greenfield sulphate of potash (SOP) minerals project development. The company has finalised the design of a

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solution that would lead to a base case or 53% renewable penetration.

• Gruyere gold mine, WA: Construction is underway for a 4 MW gas engine, a 13 MW solar farm and a 4.4 MW battery storage system to cover the 30% expansion of the Gruyere gold mine, a joint venture between Gold Roads and Gold Fields.

• West Musgrave, WA: Oz Minerals is hoping to

turn its West Musgrave nickel project into one of the world’s biggest offgrid renewable-powered mine in the world, after pre-feasibility proved that 70-80% solar and wind penetration was already achievable. The company is now turning its attention to the remaining 20-30%, looking at flexible demand response and electric fleets.

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Canada, requiring more power from the battery.

“We expect this can take at least another four or five years to become an off-the-shelf item,” says Gold Fields’ Koerting.

“What we’re doing at the moment is understanding the change it’s going to bring to our operations, and working together to influence and leverage the way the consortium work with OEMs and manufacturers of mining equipment to commercialise their technology.”

The good news is, switching to electric equipment is expected to result in a decrease in the mine’s power requirements due to reduced ventilation needs underground. “This means that our power generation at the mine doesn’t need to be upgraded, it’s just a matter of balancing energy flows in the mine,” adds Koerting.

• West Krinana Refinery, WA: BHP has signed a 10year renewable PPA with Risen Energy to supply up to 50% of its electricity needs at the Kwinana nickel refinery from the Merredin Solar Farm, the largest in Western Australia.

• BHP coal mines, QLD: BHP has signed a five-year PPA with CleanCo, Queensland’s publicly owned clean energy provider, to power 50% of its coal mining operations in the state.

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• FMG green steel plant: Fortescue Metals Group (FMG) has revealed ambitions to build Australia’s first green steel pilot plant this year.

The plant will experiment with green hydrogen and renewable electricity in steel production processes. FMG has also pledged to channel 10% (about US$400mn) of future profits into renewable energy to help meet its green hydrogen ambitions.

• Mount Isa Mine, QLD:

Modular concentrated solar power developer Vast Solar is in talks with Glencore about a 50 MW hybrid CSP, solar PV and gas plant in Mount Isa, home to four of Glencore’s copper and zinc mines. Vast Solar aims to secure offtake and reach financial close on the project in Q3 2021.

• Newstan Colliery Mine, NSW: Centennial Coal is conducting a pre-feasibility study to assess the potential of turning a closed mine

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But for many in the electrification space, the real disruption will come when miners stop wanting to convert existing equipment to electric, and instead adopt smaller, autonomous vehicles. “When you start to see things get smaller and automated, rather than bigger, that will be a big milestone, a turning point,” expects Stanway.

Australia’s abundant renewable resources and the continuous decrease in renewable technology prices have unlocked the next stage of the mining sector’s decarbonisation and empowered companies large and small to start cleaning up their power supplies — the exhaustive list of recent projects included in this article is proof of that. In the next five years, advances in energy storage technology and the ongoing development of electrified mobile equipment are set to propel the industry even further towards carbon neutrality. into pumped hydro energy storage that could supply 600 MW of renewables to the local grid.

• Cadia Mine, NSW: Newcrest Mining has signed a 15-year PPA with Tilt Renewables to secure about 40% of the Cadia coppergold mine project’s energy demand from the Rye Park Wind Farm.

ELECTRIFICATION • Nickel West trial, WA:

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BHP is trialling a Toyota light electric vehicle (LEV) at its Nickel West operations. The trial vehicle is a LandCruiser 70 that has been converted from diesel to electric via onboard battery power.

• FMG trial, WA: FMG has signed an agreement with Williams Advanced Engineering (WAE) to design, build, test and integrate a battery system to power a 240-tonne prototype electric mining

haul truck at its operations in the Pilbara Valley.

HYDROGEN • HyEnergy green hydrogen, WA: Gold and nickel explorer Province Resources has revealed plans for a 1 GW wind and solar facility in the Gascoyne region of Western Australia, to produce 60,000 tonnes of green hydrogen per year, or 300,000 tonnes of green ammonia.

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Lesson learned from the Fekola Mine solar project MELODIE MICHEL REPORTER Energy and Mines

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s solar and battery prices keep dropping, more and more African mines are considering self-generating solar power to cut fuel consumption costs and reduce CO2 emissions. But in an ever-changing technical and commercial landscape, maintaining flexibility is key. Martin Schlecht, Co-Founder and Acting COO of Suntrace, shares his advice for successful project implementation.

Energy and Mines: How would you summarize the latest advances and benefits that renewable energy and storage can offer mines?

Martin Schlecht: The situation keeps improving in terms of cost reduction, with the main recent advance being the battery price drop. Solar already offers huge benefits, particularly for offgrid mines. When you’re

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With batteries, you can mitigate the fluctuations from solar and help to keep engines cycling up and down to follow the solar patterns to a minimum.

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO SUNTRACE

running on HFO or diesel, any kW/h of solar installed will offer fuel savings and therefore cost savings.

With batteries, you can mitigate the fluctuations from solar and help to keep engines cycling up and down to follow the solar patterns to a minimum. That’s essentially what we are implementing with B2Gold at the Fekola Mine. The size of storage there will not allow a lot of energy shift from daytime to evening hours, but the battery will smooth the PV outputs and give operators enough time to turn on the engines in case of clouds, since it takes about 20 minutes for an HFO engine to go from 0% to 100%. Overall, this system will deliver 19% of fuel savings.

That project was already economic when B2Gold decided to do it in 2019. But now, almost two years down the line, we could achieve a higher solar portion for the same cost of energy, because solar and battery prices have come down and a larger system is economic today. That doesn’t mean you should

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wait until it’s cheaper, but if you build a solar plant now, focus on getting it expanded when the commercials improve.

E&M: How can you ensure that a renewable energy project for a mine is set up right from the start but maintains the flexibility needed for further expansion?

You can build the project in phases and upgrade it every couple of years to

MS: The first thing is to understand your technical system: what is your operational need and how does it fluctuate? You need to analyse your demand and what kind of back-up you need. Then, look at your life of mine: is it long enough for an investment? It’s important to look at what you have and what you need, what we call the feasibility study.

increase your solar share over time. That’s the biggest benefit renewable and storage offer.

Then, determine the right commercial structure for you. If the mine has a lot of cash in the country, they might want to buy the renewable power facility as an EPC. You can build the project in phases and upgrade it every couple of years to increase your solar share over time. That’s the biggest benefit renewable and storage offer. Or do you want to keep your cash for exploration of new mines? In that case, you might prefer to have an IPP supply

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO

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the power across the fence. But what are good PPA terms, and how are you structuring the contract to compensate for when your mine is not consuming? How long is the downtime that the power supplier needs to take into account? It’s important to look at the right technical and commercial set-up from the start, and Suntrace runs both the technical and the financial model to support EPC and IPP tenders so we can help mining clients identify the right solution for each mine.

It is important to develop a roadmap to decarbonization for the mine by considering adding more renewables over time to benefit from the market developments as they support the mine’s business case.

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO SUNTRACE

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The usual approach to power projects is a one-off investment: you put it up at the mine and then you don’t need to worry about it. That approach is changing with renewables: if you’re already procuring energy under a PPA, be it from the grid or from an IPP, then it may be difficult to implement a renewable facility due to your contract obligations. Also looking forward, if you are considering switching from HFO to a gas-based supply, it will surely reduce your CO2 emissions but will also reduce your freedom to implement renewables in addition. So it is important to develop a roadmap to decarbonization for the mine by considering adding more renewables over time to benefit from the market developments as they support the mine’s business case. Miners may want to adopt a different perspective on energy.

E&M: What are some of the takeaways from your experience working with B2Gold on the Fekola solar project in Mali?

MS: First, the project is almost completed as we speak, thanks to a very good team effort between B2Gold, the Fekola mine and Suntrace/BayWa re. From a technical perspective, the concept is working out as planned during commissioning.

Cooperation with the mine for the electrical integration worked very well, and we also structured the project implementation to commission the solar plant in increments, whenever a ENERGY AND MINES MAGAZINE

certain array was ready to generate. For instance, the battery was commissioned before the solar plant generated the first electricity. This way the HFO power plant operation could adjust to the solar in steps.

We spent intense efforts in integrating the solar, battery and EMS (Energy Management System) with the existing SCADE for the engines, and developed an operating scheme that allows for the maximization of the solar energy while keeping the operators in control of the engines. The HFO engines are not compatible with an automated start/stop of the engines, and also the continuous energy supply to the mine will always have the priority over the solar energy. We’ve already had the first successful operations where an engine was shut down and the solar plant took over.

Apart from the completion success, we were dealing with some challenges successfully, that were imposed by the Covid-19 pandemic and the mine’s response to safeguard the mining operations from the virus. Clearly and understandably, gold operations had full priority. This placed the solar project on second priority for some time and increased the complexity to implement the solar plant.

Apart from the completion success, we were dealing with some challenges successfully, that were imposed by the Covid-19 pandemic and the mine’s response to safeguard the mining operations from the virus.

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO SUNTRACE

E&M: What opportunities do you see for additional projects with Africa mines?

MS: We’ve just started another project with a mine in West Africa, and I see more and more mines coming up. CO2 reduction and decarbonisation are big objectives for mines and they are incentivized to look into this topic. Successful projects like the B2Gold Fekola solar project will increase trust in adding battery storage to the solar plant. Furthermore, miners will all figure out that solar and batteries bring economic benefits on top of CO2 savings. At Fekola, the project achieves 19% fuel reduction.

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We believe that the Fekola Solar Project can serve as a model for other mines, specifically since first results are proving that it works. The technical concerns are going away with proven references.

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO SUNTRACE

However, based on our analysis, a 30 to 40% solar share would be feasible today with the same payback period for a larger project.

Next year we could see a 50% solar share reaching the same economics. Provided you have enough space for the solar plant, the opportunity to reach a high solar share and large cost savings are huge. We believe that the Fekola Solar Project can serve as a model for other mines, specifically since first results are proving that it works. The technical concerns are going away with proven references.

E&M: You’ve already touched upon EPC and PPA structures, but what about leasing — in what cases could this option be beneficial for a mine?

MS: A lease structure might be interesting for mines with a short life: if you only have a few years left, you might not want to invest Capex to build the power plant yourself, and with a PPA, the shorter the contract, the higher the price. Of course, a lease comes at a higher cost because the facility will need to be removed after the mine closes, but it’s still less than the full Capex and allows the mine to cut CO2 emissions and achieve cost savings.

Whether this approach is useful is usually determined by a comparison with the alternatives.

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E&M: What are some of the key things mines should consider before going to tender with a project?

MS: All mines are currently receiving a lot of different offers from equipment suppliers to IPPs, EPC firms, battery suppliers, solar developers, etc. I’ve heard of a mine receiving 120 expressions of interest for a project. It can be very difficult for a mine to differentiate between them. That’s where a consultant like Suntrace can bring value, by helping the mine determine its needs and requirements in the first place. Knowing what you want as a mine, you can go to the market with a clear request, and still there will be enough competitors to meet your needs and bring the price down to a reasonable level. Sometimes taking a little time in the first step to make a solid plan can save you a lot of time and headache later in the execution.

E&M: What are you looking forward to at the upcoming Energy and Mines Africa Virtual Summit, May 4-6?

MS: We’re hoping to have a successful completion story from B2Gold before the conference so we can share operational results, and I hope it gives miners the confidence to follow without hesitation in implementing larger solar project ENERGY AND MINES MAGAZINE

Knowing what you want as a mine, you can go to the market with a clear request, and still there will be enough competitors to meet your needs and bring the price down to a reasonable level.

MARTIN SCHLECHT CO-FOUNDER AND ACTING COO SUNTRACE

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Wind and solar mapping for mines ADRIENNE BAKER DIRECTOR Energy and Mines

Interest has ramped up considerably over the last year and the last 6 months in particular has seen it spike even further. Clients are anxious to get resource assessments underway and are moving incredibly quickly to make it happen.

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n many regions of the world almost all mines are assessing renewables as a cost-effective power source for their operations. As wind and solar mapping becomes as commonplace as geological mapping we interview Simon Rigling of Fulcrum3D on the fundamentals of renewables resource monitoring for mines.

Energy and MInes: Over the last year, what have you observed in terms of miners’ interest in assessing renewable energy resources?

Simon Ringling: Interest has ramped up considerably over the last year and the last 6 months in particular has seen it spike even further.

Clients are anxious to get resource assessments underway and are moving incredibly quickly to make it happen. I doubt there are many mining companies out there who haven’t either begun the journey already or aren’t well down the path of due diligence.

EandM: What are the key drivers behind mining’s interest in understanding the potential for wind and solar at their sites?

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SR: Similar to geological mapping of an orebody, wind and solar resources need to be mapped to ascertain their potential, quality and yield.

Assessment data is used to establish generation potential, optimal generation mix (wind / solar / diesel / storage), optimal location and project financing.

EandM: Solar has traditionally been the renewable energy option of choice but more recently were seeing large-scale wind gaining momentum - why do you think mining is becoming more interested in wind alongside solar?

Wind and solar resource assessment campaigns are generally conducted over a minimum 12-month period to cover seasonality.

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SR: Wind and solar complement each other really well from an intermittency perspective and both have a similar levelised cost of energy (LCOE) so the level of interest we are now seeing in wind from the mining sector makes a lot of sense from that perspective. Combining wind and solar with storage puts energy independence in reach for the mining sector.

EandM: What is important for miners to consider when starting the process for analyzing their renewable energy resource potential?

SR: I think the main one is not to lose sight of assessment timeframes. Wind and solar resource assessment campaigns are generally conducted over a minimum 12-month period to cover seasonality. If you’re in a position to do so, start your assessment campaign as soon as possible. You will save a lot of time and money in the long run.

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Its unique design delivers excellent performance in complex or simple terrains, is robust and highly portable making it ideal for remote locations.

SIMON RIGLING FULCRUM3D

EandM: Can you tell us about some of the work Fulcrum3D has done with the mining sector?

SR: We have worked with Rio Tinto, FMG, AngloGold Ashanti, Goldfields, Sirius Resources, Province Resources, Juwi and Aggreko amongst others on either resource assessment campaigns or solar forecasting. We have deployed our Fulcrum3D Sodar (Sound Detection And Ranging), which was designed from the ground up for the wind energy industry, to assess site performance for a number of mining clients, many of whom have added solar monitoring to the unit to conduct both assessments concurrently. Its unique design delivers excellent performance in complex or simple terrains, is robust and highly portable making it ideal for remote locations.

Fulcrum3D also provide short-term solar forecasting for hybrid off-grid power systems to better integrate PV by allowing higher penetrations of solar (reducing fuel use) and by optimising the cycling (charge/discharge) and size of battery storage required, effectively increasing lifecycle and reducing overall cost. This is achieved with the Fulcrum3D CloudCAM which detects clouds, predicts cloud movement and provides cloud and solar irradiance forecasts from 5 to 15 minutes in advance. More recently we have supplied a number of Fulcrum3D Sodars to Green Hydrogen projects that are busy carrying out resource assessment campaigns. There is so much going on at the moment it is a very exciting space to play in!

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Economics and expectations of renewables in mines – interview with African Gold Group ADRIENNE BAKER DIRECTOR Energy and Mines

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frican Gold Group CEO Danny Callow has discusses the drivers, economics and expectations of integrating renewables in to AFG’s gold mine in Mali

Energy and Mines: What are the key drivers for African Gold Group to move forward with a hybrid power plant for the Kobada Gold Project?

Danny Callow: Mali has limited grid power and most mining projects rely on power generated from diesel or heavy fuel oil generator sets. This is not only costly, at around 25-30c/kWh but also environmentally damaging in terms of emissions. By harnessing the power of the sun, through a solar and battery power plant, allows us to potentially produce up to 35% of our power requirement through green energy, and reduce our carbon footprint substantially. In addition, the blended cost of power can be reduced to around 15c/kWh and this results in potential massive savings on fuel alone for the project. In our case, in the region of US$5 million per year.

We do not profess to be energy experts and so we have teamed up with a service provider who builds, owns, operates

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The remarkable aspect of a hybrid power plant is that it uses proven, offthe-shelf and reliable technology, which is guaranteed for much longer than the current life of mine.

and maintains multiple plants around the world. We see a partnership with this model where the experts provide the power at the lowest possible cost, we have no risk on the capital to build the plant and through a power purchasing offtake agreement we are provided with the power that we require, when we need it.

DANNY CALLOW CEO

DC: The remarkable aspect of a hybrid power plant is that it uses proven, off-the-shelf and reliable technology, which is guaranteed for much longer than the current life of mine.

I think that many companies avoid the “green energy” discussion because they believe it is blue sky technology, expensive and unreliable. This couldn’t be further from the truth and the fact is that as more countries bring in stringent Carbon reduction targets, the more money is invested into the green energy sector which continues to bring down the cost of capital for these projects.

AFRICAN GOLD GROUP

So in summary, reduced capital exposure, lower cost and significant reduction in our carbon footprint make this a very good decision to move forwards on.

EandM: Which technologies are on your radar for future energy plans?

I believe that we will see huge advances in battery technology to store power from solar over the next few years, as well as step changes in efficiency of solar panels.

EandM: Where are the gaps in the market for energy services and suppliers - what energy challenges are not being fully addressed?

DC: I feel that constraints to service suppliers in the green energy sector are going to be the countries who have not set 32

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ambitious carbon neutral goals and who are yet to embrace the benefits of green energy. Once governments decide to include green energy and allow independent power producers to feed into the national grid, we will see a huge demand for goods and services in this sector and a huge demand for additional supply of battery commodities far above anything we have seen before. This huge demand for these types of metals will result in investment in the mining industry and more opportunity for new mines to build green energy infrastructure into their plans. This huge investment opportunity will bring more efficient and effective technologies which ultimately will drive down the price of power. I see a very bright future for green energy suppliers over the next decade.

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ESG, renewables and mining Interview with Syrah Resources ADRIENNE BAKER DIRECTOR Energy and Mines

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yrah Resources COO Julio Costa discusses how ESG is fundamental to their operational approach and what is needed for future successful renewables deployment in mines.

Energy and Mines: What are your primary aims with integrating a solar and battery storage hybrid system in conjunction with existing diesel generation for the Balama graphite mine in Mozambique?

Julio Costa: The benefits of the solar and battery project are twofold: it will substantially improve Balama’s ESG credentials, by improving our energy usage efficiency on site and therefore lowering our carbon footprint; and secondly, it will also lower our operating cost base. So, the project makes both environmental and economic sense.

Regarding ESG credentials. On current estimates, the system will deliver a renewable energy penetration rate of almost 40% of the mine’s total power needs which, on a yearly basis will save over 13,000 tonnes of CO2 and 5.5 million litres of diesel. The solar hybrid system will give Balama one of the highest levels of renewable energy penetration of any off grid mine in Sub-Saharan Africa. Being able to reduce the cost of a substantial portion of the energy used on site, whilst also improving the operations ESG credentials makes this a very attractive project for us.

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EandM: How important is ESG as a driver for the project - have you had feedback from end-buyers looking to source sustainable materials?

JC: Syrah has always had ESG performance strongly embedded into our DNA. Our ESG credentials are underpinned by ISO:14001 (Environmental Management) and ISO:45001 (Occupational Health & Safety) certifications at Balama and our performance and willingness to support the sustainable development of our host community.

Our ESG efforts at Balama have attracted official recognition including: 2019 Sector Leader in ESG Reporting by the Australian Council of Superannuation Investors (ACSI); AAMEG Africa Awards 2019 Winner - Best Innovation in Corporate Social Development for the design, construction and operation of the Balama Professional Training Centre; and, International SOS 2019 Duty of Care Awards finalist for leading Malaria Mitigation practices.

We believe operating with the highest possible ESG practices is the right thing to do and we do it with passion. We are absolutely seeing an ever-increasing focus on ESG by existing and potential customers and also increased scrutiny on ESG from our investors. End users are increasingly being held accountable for ESG, EV makers will increasingly need to demonstrate the product and emissions lifecycle of their vehicle to substantiate their “eco-friendly” credentials and customers will opt into supply with best practice ESG credentials.

We are always very pleased when the topic of ESG comes up with end-buyers or other stakeholders. We are very proud of our ESG credentials and sharing the work that we do at Balama on this front with end-buyers, or any stakeholder, is always an easy and enjoyable conversation to have.

EandM: What do you see are the main barriers to the further integration of renewables for mines in Africa?

JC: As it is known, Africa is a very diverse continent with 54 countries.

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The barriers will vary from country to country, however we can draw from our experience in Mozambique. We strongly believe that Mozambique is ever increasing its reputation as a balanced ground for sustainable development. The Mozambique Government Regulatory framework promotes and supports this type of investment and the bureaucracy is always open for dialogue in terms of sustainable development. Mozambique is also known to benchmark policies and approaches with other countries.

A combination of factors made viable for us to pursue implementation of renewables and we noticed some difficulties and opportunities to improve along the way: • A clear national framework for regulations, incentives and taxes around renewables with a long term view • Deregulation and removing the barriers of entry for new energy providers will allow for healthy competition and will encourage renewable investment across all industries.

• The development of local companies in the area of installation and maintenance • A long term view on energy security strategy for the country • Specifically to Mozambique, the development of new legislation regarding electricity with right level of consultation and consideration to renewables ENERGY AND MINES MAGAZINE

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