The mining industry faces challenges such as lower mineral and metal prices and the threat of further stigmatization. Renewable energy could be part of the solution as it improves the energy cost of mines, counters opposition from ecological movements, and above all sends a strong signal of forward orientation, progressive management and corporate governance.
A study conducted by Dr. Thomas Hillig Energy Consulting (THEnergy, Munich, Germany) based on interviews with financing, mining, and energy experts shows that the indirect effects on the mining company’s market value are more significant than the pure electricity cost savings.
Mining companies face strong opposition
Energy costs in mining are constantly increasing. Particularly in remote mines, wind or solar power plants can reduce the energy costs considerably, which has a direct influence on the cost position of mining companies. The business case for renewable energy is normally positive for mining companies, nevertheless they are a long way away from making it into EPAs “National Top 100 list” of US green power users.
Mining companies also face strong opposition. “Move Your Money UK”, for example, is a national campaign that calls on depositors to move their savings away from five UK-banks because they support assets in oil, gas and coal extraction.
Mining companies realize that renewable energy has become an economically attractive solution
As solar and wind prices have dropped considerably in recent years, many institutional investors have entered the renewable energy industry. Leading mining companies such as Barrick Gold, Rio Tinto or Glencore as well as smaller players such as Shanta Gold have realized that renewable energy has become an economically attractive solution for many mines and have built first pilots.
“Mining companies that actively move towards renewable energy self-consumption show that they have realized that the world around them has changed and that there are threats regarding energy costs and environmental movements”, underlines Dr. Thomas Hillig.
THEnergy study challenges mining companies to act quickly
The THEnergy study challenges mining companies to act quickly, to come up with greenhouse gas mitigation and renewable energy targets, to set other non-financial performance indicators regarding energy and to conceive a comprehensive renewable energy strategy.
As underlined by Hillig, “ambitious targets and transparency grant first movers many advantages in communication. If substantial measures are taken and financial markets are targeted with the sustainability communication strategy, a positive effect on the market evaluation and stock prices can be expected.”
The study can be downloaded at: www.th-energy.net