CRONIMET Mining Power Solutions Offers Energy Solutions to Off-Grid Mines in Africa and Other Remote Areas
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By
on 2/22/2015
Rollie Armstrong (third from the left), Managing Director of CRONIMET Mining Power Solutions, took a few minutes during the PDAC in Toronto to share with Metals News information on the energy saving options they provide to mines working in remote areas of Africa.
Armstrong said, “As the Managing Director of CRONIMET Mining Power Solutions, I have been actively offering innovative and flexible power solutions to mining companies in Africa for over two years now.” CRONIMET offers photovoltaic energy technology to mining companies that are working in areas with no utility grid connection and areas with low connectivity. Armstrong related, “Our real value proposition is to reduce the operating costs and volatility by replacing diesel with solar power for off-grid mines in Africa or in other remote areas of the world. I think we have spent the last two years breaking down information barriers with our own reference project. It is fair to say that five years ago renewable energy solutions were not commercially viable, but today ignoring them is not commercially viable.”
Photovoltaic power plants can significantly reduce their costs and improve their environmental sustainability record. Said Armstrong, “This allows them to reduce their carbon footprint and to reduce their environmental impact, but equally important, renewables allow mining companies to achieve sustained operating cost reductions making the mine more competitive while commodity prices are in a down cycle. ”
Armstrong and his team are working predominantly in the southern hemisphere. He said, “We are very focused on Africa because we have some of the highest solar radiation on the planet combined with enormous natural mineral resources being mined by remote off-grid operations.” Armstrong sees Africa as a place with gigawatts of potential. He said, “We have a continent that has a very low amount of centralized grid connectivity and decentralized energy solutions will offer a virtuous cycle of growth amounting to gigawatts of installed PV power and billions in GDP growth.”
“The technology we are applying to off-grid captive diesel mini-grid is solar. There are areas where we are looking at wind if the resource is available and we are looking at ways to store solar power with pump hydro storage, but we see the overwhelmingly ubiquitous source of renewable energy in Africa being solar irradiation.” CRONIMET has been the catalyst of the hybridization of captive power plants synchronizing photovoltaic power plants to existing genset mini-grids where mining operations have no grid connection. These tend to be very remote or junior mines. These are mines whose operations are pegged to volatile fuel prices at their gates. Now there is a commercially and technically viable alternative. We can penetrate their diesel power mini-grids with over 60% of photovoltaic power and that allows them to shave off about 30% of their annual diesel outlay.”
To date, CRONIMET is working with a wide variety of companies. Armstrong said, “We are doing this throughout Africa. We are doing this for base metal mines in Namibia, for copper and diamond mines in Botswana and we have being approached by developers and mines themselves from Morocco to Madagascar seeking a solution where CRONIMET will sponsor the capital outlays and the mine can partake in immediate operating cost reductions. Mining companies and any industrial companies whose business models rely heavily on stable and large energy loads are interested anywhere centralized power infrastructure is unable to keep up with demand.” Armstrong’s team is looking primarily at smaller and mid-sized companies in the mining sector, though large majors are standing up to champion the progression to more sustainable mining by adding renewables. He said, “Specifically, we are focused on junior to mid-sized mining companies. These tend to be companies that are not grid connected and whose value chain ends at concentrates, meaning they are not powering smelters. The mines we are generally working with are running anywhere from 1 MW to up to 50 to 60 megawatts of power, which is a lot of power. The real determining factor of how much savings the mine can expect from buying electricity from CRONIMET’s PV plants is the life of the mine. If we are talking about mines that have ten, twelve, fifteen years or more then these owners can expect huge annual cost savings by purchasing daytime solar electricity from CRONIMET and replacing 30% of its annual diesel. This is not only a cost cut, but it is a natural hedge against volatility”
In addition to the mining sector, Armstrong sees applications in other industries. He said, “You can add to that companies, like cement or steel companies, which are using furnaces. Today, almost any heavy electricity user in the SADAC region, where centralized state owned power infrastructure is struggling to match demand, cannot afford not to review their security of supply strategy. Today, grid connection no longer guarantees reliable and stable electricity all the time. When the grid goes down, or load shedding occurs, are mines switching to diesel during the day? They should be using solar to gap that load shed. If they are off-grid entirely then the math is even clearer. Let’s take an example of a mid-sized mining company with a 10 megawatt peak load. They are lucky if they are paying $1 per liter at the gate, which roughly converts to $0.25 US per kilowatt hour. CRONIMET will come in seeking no capital outlay from the mine and offer a solution to penetrate their mini-grid with 60% installed solar power, or 6 MW. The 6MW of installed photovoltaic power will generate some 12 GWhs of electricity per year in southern Africa offsetting some 30% of the electricity previously generated with diesel. Depending on the mine life and the strength of the power purchase agreement that PV electricity could be sold at $0.15 US per kilowatt hour, or less representing a 40% decrease to diesel electricity prices for 30% of the mine’s annual load. These types of savings are too significant to ignore”
Unique to the industry, CRONIMET has been and is operating PV/Diesel hybrid facility in Africa. It is an integrated mining company itself, providing commodity trade finance for base metal mining companies. CRONIMET offers mining companies a fully financed one-stop shop for cheaper energy for no up-front costs. Armstrong said, “We aren’t asking the mine to buy PV panels or take technology risk. That rests with us. Though we do offer our mining PPA off-takers the option of buying the power plant if they are inclined or become inclined to do so. Our main business though, is to sell mines cheaper electricity, generated onsite, with no price variability. We are part of a mining company that is treating chrome and PGM ore in Africa so we understand what miners are going through right now.
Awareness in the mining industry has grown over the last two years. Mines, advisors, banks and developers are coming to us to talk about the value drivers. CRONIMET has a singular experience in Africa and our stakeholders are investing their trust in our track record”
http://www.crm-ps.com /
http://www.CRONIMET-mining.com/
African Power Solutions Head
Office
CRONIMET Mining Power Solutions SA (PTY) Ltd
Building C, Willow Wood Office Park
Corner 3rd & Cedar Roads
Broadacres 2021
Johannesburg, South Africa
+27 11 - 958 0544
Global Power Solutions Head Office
CRONIMET Mining Power Solutions GmbH
Ottobrunner Str. 39
82008 Unterhaching, (Munich) Germany
+49 89 - 919 290 - 170
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