Mining is one of the biggest industries in Africa and currently constitutes about 11% of the world’s energy usage. Running this massive industry is no easy task – up to 40% of a mine’s production costs can be consumed by its energy source! For consistent, reliable mine energy solutions, go HFO…
HFO has been a reliable fuel source for industry for decades; initially used as a marine fuel, its qualities were soon put to use in other industries, such as the power industry. This fuel is frequently used as a backup or alternative when coal-powered power plants are low in their coal reserves – including at South African power stations. With other fuel options being expensive by comparison, HFO quickly became a preferred energy solution for power operations – including those at mines, where energy is a pressing concern.
Many countries in Africa experience a significant power deficit, affecting the operation times of mines, which lead to a series of other financial impacts such as decreased work times and decreased profit: if the mine cannot churn over the workload it was created to, it cannot meet targets or quotas. South Africa experienced this first hand when poor power supply in the mining industry led to a dip in the GDP in 2015.
This risk is a huge cause for concern for mine operations across the continent, resulting in an active search for more reliable, cost-effective power sources. At present, the energy options for a mine are as follows:
Despite the variety of energy solutions available, selecting one to be used at mines and in mining operations is no simple matter – each option has to be carefully considered.
Use of a country’s national grid may seem like the most reasonable choice but can present a host of problems that simply cannot be ignored. The national grid can be unreliable and may pose problems through unplanned (or even planned!) power cuts, rolling blackouts and poor, damaged or unmaintained infrastructure resulting in power outages.
Unlike many other industries or businesses, mines usually have a structured, set lifetime – meaning they will only operate for a specific period, or until the resources being mined deplete – the time for which is usually carefully estimated as well. With this schedule in mind, it is unrealistic to rely on a power source that may not be always be operational. Amongst a mine’s other costs, sourcing power from the national grid also incurs costs – costs that must be covered through the carrying out and completion of the mine’s workload. A mine cannot cover the cost of its power source if the source of its energy isn’t powering the mine long enough to do just that!
With national grids no longer seeming like a viable option, energy supply is often internalised through means of diesel generators, usually outsourced and rented from private companies. Generators vary in size, with larger generators usually being used at bigger mines. The larger machinery will require more diesel, mounting setup and fuel expenses further… it’s easy to see how costs can climb when using diesel, an increasingly expensive commodity!
Then there’s the option of renewable energy, becoming popular in other industries. Solar energy may be the most popular so far, with solar panels popping up on rooftops, street poles and businesses across the continent. The capex for this option for a mining context, however, often has mines turning back to conventional power sources, or using it to supplement renewable energy. With such high upfront costs, investors may be reluctant to foot the bill, despite the fact that, in most cases, the cost of renewable energy plants/infrastructure is recouped over time.
Another factor deterring potential investors is that African countries often have volatile economies, meaning investments can turn sour, making investing in renewable energy riskier.
Apart from the financial requirements of this energy solution, another problem arises when using this option – inclement weather! Placing the users of solar power and wind turbines at risk in particular, the location of mines can often make this energy solution simply unsuitable for use. The risk is higher if a mine operates for long periods and requires around-the-clock energy provision, which cannot necessarily be provided by renewable energy sources which rely on the sun, climate or weather in areas in which the reliability of these elements is inconsistent.
With national grids often unviable options, diesel generators proving to be an ongoing expense and renewable energy a massive upfront cost, many mines operate off of their own captive power plants – plants built solely for the mine’s use, giving the mine not only the ability to control their own energy supply, but also to potentially profit from it as they can (theoretically, at least!) sell surplus energy to surrounding areas. Much like conventional power plants, captive plants need fuel to burn in order to create energy. The fuel choice here is HFO or heavy fuel oil.
Uninterrupted daily mine operations mean uninterrupted production and, by default, obtaining the profit the mine was designed to produce. Being able to run without interference ensures the success and profitability of the mine – high capex means each mine has to perform and produce its projected workload. This is why the reliable supply of power to each and every mine is so important – and why being selective about the energy solution put to use in a mine is paramount.
Used in mining projects across Africa, HFO has proven itself the sensible option time and again, ticking all the boxes – substantially lower capex, lowering operating and maintenance costs, a reliable option when alternative fuels remain unpredictable, and even reducing noise in the power creation process. For more information on how HFO can benefit you, speak to us.