Canadian gold miners are expected to adopt even more alternative energy this year as the sector continues to focus on paring down costs to remain competitive in a volatile gold price environment, a new report suggests.
According to BMI Research, declining ore grades will drive Canadian gold miners costs higher, pushing companies to find fresh ways of improving competitiveness.
Tightening environmental regulations, such as the recently passed carbon tax at Cdn$10 a tonne — the country’s first— will do nothing but accelerate this trend, the report says.
Tightening environmental regulations, such as the recently passed carbon tax at Cdn$10 a tonne — the country’s first— will do nothing but accelerate the adoption of alternative energy sources.
An obvious alternative, the analysts argue, would be integrating alternative energy sources other than diesel to power their operations, as the federal government has put in place economic incentives and favourable policies that would support such decisions.
The use of alternative, greener energy is said to help miners significantly reduce operating costs from consumption of traditional power sources such as diesel, coal, propane and natural gas. It is also considered an efficient way of removing most if not all greenhouse gases associated with the movement of ore and waste rock.
A case in point quoted by BMI is Goldcorp’s (TSX:G) (NYSE:GG) plans to turn its Borden mine into an all-electric operation.
Located near Chapleau, Ontario, about 160 km west of the company’s Porcupine mine, Borden is being built to use electricity and battery-powered underground fleet only, which will eliminate all greenhouse gases (GHGs) emissions equal to roughly 50% of the total GHGs on site, or 5,000 tons of CO2 per year.
Other gold producers, such as Barrick Gold (TSX, NYSE:ABX), have also taken steps towards embracing alternative energy sources other than diesel. In 2015, the Toronto-based miner reported 18.5% of its electrical power came from renewable energy and said it planned to increase that share.
BMI and industry actors agree the sector is in need of bold ideas as the gold price outlook for this year isn’t much better than 2016, when many thought the bull market would return.
That didn’t happen. Gold climbed only 8.5% last year, with most of the gains recorded in the first half and prices closed at around $1,150 an ounce, down 16% from their July peak.
4 Comments
U308
Embrace Green Energy? What horseshit! Producers are going to eat the cost of this added taxation in the short run and adopt “green” energy when it makes economic sense to do so.. meaning when the government subsidizes forms of energy that can’t compete on the open market. In the long run it means that more Canadian operations will close prematurely and new projects come on line in jurisdiction that don’t tax the goose that lays the golden egg.
mijanko
I don’t think “Green Energy” should receive credit for this.
Is it green?
Emissions: In fact, as the Ontario Society of Professional Engineers wrote in 2015, the addition of wind and solar power generation will double CO2 output by 2032 because they require natural gas backup. The Wind / Solar / as combo emitted 200 units CO2 per unit of electricity whereas our current system average is 40 parts CO2. Conclusion: What we are told is “green” is not.
Reliability: That same year in Ontario, wind generated only 30% of its nameplate capacity and over 80% of that was at times when Ontario could not use it. Wind accounted for 4% of total supply, yet over 30% of system costs. This is without subtracting the energy required for the turbines to spin themselves when wind is insufficient.
Financial Feasibility: Ontario has lost over $2 Billion dollars annually from “green” energy power generation because we pay generators approx. 13.3 cents per KWh, yet sell it to New York, Quebec and Michigan for around 4.3 c/KWh! They thank you for doing your laundry at midnight. This despite wind / Solar having first to grid rights.
I could go on to indicate the untold suffering of people to to monotonal, incessant pulsating infrasound in people’s homes, etc., but ultimately my point is to clarify that most of the power, most of the reduced emissions and most of the financial feasibility is due to Hydroelectric and Nuclear power generation. Not industrial wind turbines, which have now been proven in Ireland to have cause families to suffer and abandon their homes.
I understand electric had had such effects in mines, but when considering these impacts, we must consider the whole chain, not just the last Mile. Same with the use of the term “green” energy.
Thank you.
Caper Nova Scotia
The carbon tax will do nothing for Canadians except put money in govt coffers pockets.
It will cost jobs and make all classes suffer.
The global warming myth has been preached and now taught as reality…and it’s not.
Hypothetical and ‘educated’ guessing should not be transferred to pick the taxpayers pockets.
Companies that want to go green is simply a way for the shareholders to make more $$ through subsidies…look no further
Bill_Wall
Solar is now the lowest cost source of new energy and is getting more compelling all the time. Miners in different parts of the world are starting to install it in remote locations that are far from the grid, finding that it is cheaper than running diesel generators and not because it is “green”.
Energy storage remains the biggest roadblock to a sweeping use of PV solar power that is based economics alone.