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Potential seen for old mines to host new renewables

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

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Potential seen for old mines to host new renewables

Advocacy group the Rocky Mountain Institute partnered with Australian mining giant BHP Group Ltd. to redevelop 22 legacy mine sites in the U.S. to host renewable energy production, zeroing in on six locations in the Southwest as their first targets.

The partnership is the first major collaboration of the Rocky Mountain Institute's, or RMI's, "Sunshine for Mines" program, part of the Boulder, Colo.-headquartered nonprofit's broader mission of developing market-based methods to ease reliance on fossil fuels.

RMI's full screening of the 22 BHP mines in the U.S. found five sites in Arizona and one in neighboring New Mexico best-suited to host renewable generation, Paolo Natali, director of mining projects for the Sunshine for Mines initiative, and Alastaire Dick, director of mining programs and operations leader of the initiative, said in an interview.

"The screening identifies that some of the best places, from a techno-economic standpoint and from a community engagement standpoint, are in Arizona and New Mexico, and we are currently working on those," Natali said.

In what is likely to be the most common scenario for installing renewables at mine sites, solar panels can be situated atop tailings dams, the heaps of mining refuse at metal mining sites, according to Dick.

"[Tailings] typically tend to stack up in these big dumps, which have really nice flat surfaces, which are really good for putting on solar [photovoltaic]," Dick said, identifying gold and copper mines as particularly well-suited for renewable energy development.

"It's wherever there's really good tailings dumps and whether the mine's topography is typically favorable toward the likes of solar. Or if there's a lot of wind, then you can look at that," Dick added.

Solar storage is also an attractive option for would-be developers, said Dick, who noted that building solar and wind generation facilities on locations such as mines reduces the number of natural areas razed for development.

"Mines are typically pre-disturbed, so you're not going to have to greenfield, and that's something else that I think is overlooked," he added.

Among the most attractive arguments for developing renewables on legacy mining sites is that nearly all U.S. mines are easily connected to the grid, with substations and transmission lines already existing, according to Natali and Dick.

BHP's mines in Arizona and New Mexico, for example, were once the largest consumers for the states' utilities and are already outfitted with transmission infrastructure. However, the transmission lines on these sites are 20 years old in some cases and would require maintenance and refurbishment.

RMI believes that BHP's mining sites in the U.S. and Canada could host upward of 500 MW of renewable generation. While solar is the favorite at the majority of the sites, a few Canadian sites are well-suited for wind development.

"If you can build a wind facility, even if it's maybe less-attractive from a theoretical standpoint, those megawatt-hours that you produce with the wind facility might be more sellable because they come at different hours during the day," Natali said.

Opportunity for site owners

RMI views the Sunshine for Mines initiative as a way for owners of legacy mines to potentially optimize these assets.

"I think miners don't actually know the value that legacy mines provide for them for revenue generation, for post-closure rehabilitation, and to uplift the communities that typically exist around the mines," Dick said. "Mines can't just sell an asset and pass that liability on; they actually have to retain a hand in rehabilitating that mine."

Closed mines still employ a small workforce for land reclamation and water management, and their owners must ensure the tailings are stable. "From a technical standpoint, you don't want to put solar panels on land that can slide," Natali said. "You don't want to waste your energy by putting things on a tailing dam that is not stable."

The preferred method for mining companies to monetize land with renewables potential would be to lease the land to a developer who would operate the project, according to Natali.

While some mining and exploration companies may not wish to own power generation, others may be well-suited for it. "Some of them have power trading desks," Natali said, adding that with these types of landowners, direct ownership is feasible.

Some oil and gas companies, for instance, have expressed an interest in building renewables on their land themselves, according to Natali.

Shale gas exploration sites, for example, often use little of their land's surface.

"You have land available for putting things on, and some companies are thinking about it," Natali said, though he acknowledged none of those companies have yet moved in this direction.

Beyond legacy sites

Natali and Dick's group works primarily with mineral exploration companies, though it does not focus exclusively on repurposing legacy sites.

"We collaborate directly with mining companies. You can think of us as independent advisers to mining companies who have an interest in adopting a pathway of decarbonizations or reducing emissions in the operations. And that could happen in various ways," Natali said.

This includes partnering with companies to help them transition their on-site electrical generation at operational mines to renewable power, initiatives driven in part by investor demand for more environmentally friendly technology.

"The mining industry right now is not necessarily set on the course to achieve the decarbonization goals that are needed from a science-based perspective to fulfill the needs of the planet," Natali said.

While converting abandoned mining sites into locations for renewable generation assets and installing renewables at operational mines will guarantee a few jobs, the economic opportunity for local communities is more indirect.

"The main thing is that then you are going to have reliable, stable renewable power to attract the industries that want to build facilities," Natali said. "[Tesla Inc.] will want to buy low-carbon copper at some point because they will have to prove that their cars are built in a low-carbon value chain. If the mix in that particular location is very green because there is a lot of solar being produced there, they will have an edge."