Will Lower Oil Prices Dampen the Mining Industry’s Appetite for Renewables?
Today Energy and Mines has published an article looking at the impact of cheaper oil on the appetite for renewables with insights from CEOs and senior executives from Anglo American, IAMGOLD, Terango Gold, and Advanced Explorations. The effects of lower oil prices is dramatically different for grid-tied and remote mining operations. In addition, the life-of-mine is a key consideration for mining CEOs looking at renewables options with the lull in commodity pricing proving a stronger driver for near-term energy decisions than oil prices.
Quotes from the article include:
“If we go to the off-grid case, renewables are still highly competitive.” – Fernando Cubillos, partner, Antuko
“No one believes that oil is going to be $40 or $50 per barrel in the long term. Most of the analysts believe that the fundamentals still say $75 down the road.” – John Gingerich, chairman and president of Advanced Explorations
“[Lower oil prices] work against replacing existing fuel sources with renewable energy at lower prices,” – Richard Young, President and CEO of Teranga Gold
“Everything has to be driven by economics. So part and parcel with the drive to renewables was [the fact that] oil prices were $100 a barrel. That made our costs [in Burkina Faso] come in at around $0.32 per kilowatt hour. If that drops to $0.20, the economics change.” – Steve Letwin, President and CEO at IAMGOLD
“The cost benefits of renewables will still be there. Big copper mines run for twenty or thirty years, so you need to be thinking about life-of-mine costs and life-of-mine issues and the environmental impact of your footprint.” – John Gingerich, chairman and president of Advanced Explorations