Australian mining giant BHP says it expects to make significant cost savings when it replaces gas with renewables to provide most, if not all the power at the Escondida copper mine – the world’s biggest – in Chile.
The company’s chief external affairs officer Geoff Healy says the company is in the final stages of contracting a renewables power supply for the 1.2 million tonne operation, as part of a tender of its electricity supply in both Chile and Australia, including the Olympic Dam project.
“We’re now in the late stages of securing a long-term contract for renewable power supply that could deliver significant cost savings relative to our current gas-fired supply,” Healy told investors in London during a presentation on “social values”., according to Recharge.
RenewEconomy reported in June that BHP put its electricity contracts for its operations on Australia’s main grid and in Chile out to tender, expecting renewable energy could present the cheapest and most efficient option.
BHP consumes about 6 terawatt hours in Chile, or around seven per cent of that country’s annual electricity demand, and it also has a 300MW requirement for the operations on Australia’s National Electricity Market, including for the power-hungry operations at Olympic Dam in South Australia.
Chile – and particularly the Atacama Desert where the Escondida mine is located – has some of the world’s best solar resources.
Other miners have already turned to renewables in Chile. Last year, the National Mining Company of Chile (ENAMI) signed a contract with Spain’s Acciona Energía to buy solar power for its operations, and in July Anglo American signed a contract with Enel to supply wind and solar power for its mining operations.
Healy’s presentation – which focused on BHP’s desire to shift from a position of maintaining “a social licence” to creating “social value” = also looked at BHP’s climate plan and its commitment to spend $US400 million over five years targeting emissions reductions, although CEO Andrew McKenzie at the time also cast doubt about the prospects of renewables.
The $US400 million spending program would include converting site vehicles from diesel to electric, development of new technologies, including batteries and new steel making processes, cutting its own direct emissions and encouraging suppliers and customers to do the same.
Healy said the decision to invest in renewable energy is not only aligned with its sustainability goals but also makes economic sense. He said Escondida would also look to desalinate water using renewable energy technologies.