Richard Spencer is CEO of U3O8 Corp., a Canadian-based junior mining company focused on advancing uranium projects in South America. Spencer is currently exploring renewable power options for its Laguna Salada site which is a uranium-vanadium deposit in Patagonia, Argentina and will be presenting at the 3rd annual Energy and Mines’ Toronto Summit on October 22-23. Here he provides a preview of the drivers behind his review of renewables options including wind, solar and storage, and his ideas on how to make the economics work for renewables by factoring in opex as well as capex when evaluating power options for mines.
Q: What are the main drivers for your decision to investigate wind power options for your Laguna Salada operation Patagonia, Argentina?
A: Firstly, the project is relatively remote, so capex and opex related to various power options is relatively high. And there’s no question that the deposit is located in the “roaring 40’s” – annual average wind speeds are 15km/h. Clearly the wind represents a potential source of power – the economics of which warrant investigation.
In terms of solar power, the potential from Laguna Salada being in a semi-desert area, is tempered by the high latitude (44°S) of the project. Solar intensity ranges from a low of 50W/m2 in winter to 320w/m2 in summer – with an annual average of 160W/m2.
The wind typically blows between about 10am and 10pm in Patagonia, which implies that a power storage / hybrid system would be required for night-time power generation. The PEA on Laguna Salada models the production of vanadium as a by-product – and the potential for the project to showcase Vanadium Redox Batteries is an intriguing possibility for storage of excess power for use at night.
Q: What do you think are some of the common misconceptions about the way mining operators approach power decisions?
A: That renewables are simply uncompetitive with conventional power sources – other than in extremely remote locations. We tend to look at published information of the capex of renewables, and come to a negative conclusion without considering the various financing models that the renewables companies offer.
We also need to compare the Capex and opex of the conventional power sources with the capex and typically much lower opex of renewables over the life of the operation, rather than just comparing capex. We also need to factor in some of the softer issues: the contribution that a hybrid system may make to having influencing a local community or government to green light a project; or the extent to which awareness of the need to reduce one’s carbon footprint may have in influencing the decision by financial institutions to finance a project.
Q: What are you hoping will come out of cost analysis of alternative energy for this project?
A: In addition to evaluating the economics of a hybrid system compared with conventional power sources, I’m looking forward to getting a sense of the rate of change of that, even if the economics of a hybrid system doesn’t make sense in today’s analysis, that we have a reasonable idea of when it may become competitive with conventional sources of power.
Q: What are you looking forward to at this year’s Energy and Mines Toronto Summit on October 22-23?
Hearing from other delegates how they have approached and evaluated energy alternatives for their projects, hearing about innovation in the industry and where we are headed, and at what rate, what we can expect in the near future.
For details of the Energy and Mines Toronto Summit – Click here