“I am hoping to learn more about the cost-effectiveness of using renewables for mining [at the Energy and Mines London Summit on January 28-29]” says Christian Schaffalitzky, Managing Director and CEO, Eurasia Mining and non-executive chairman of Kibo Mining.
With almost 40 years’ experience in minerals exploration and development, Schaffalitzky is currently developing a platinum mine in Russia. He co-founded the international consultancy CSA Global and subsequently was a founder of Ivernia West, where he led the exploration, discovery and development of the Lisheen zinc deposit in Ireland.
On January 28-29, Schaffalitzky will be joined by the CEOs of Bacanora Minerals, Alecto Minerals, Berkeley Energy and Alufer Mining to discuss energy strategies for junior mines and the appetite for renewables at the Energy and Mines London Summit. In this Q&A interview, this experienced miner discusses his top energy concerns.
Q: What would you say are the top 3 energy concerns that your company is facing in bringing the platinum mine into production next year?
A: Our platinum project is unusual in that it will be an alluvial project, with almost all the capital equipment being mobile. In addition, the project life will be 10-15 years. The main power option for such operations is 100% diesel, which is quite expensive, as producers in remote areas know.
However, we are 7km from a fixed-line power supply and the heavier machinery we use, such as draglines, can be operated using electrical power. The estimated savings in using electrical power is 30% of total operating costs. Nevertheless, the cost of diesel is the main cost center concern for energy consumption and transportation.
Q: How have changes in commodity prices affected your energy strategy?
A: The platinum price has fallen dramatically over the last 5 years. At the time of writing, it is below $1,000/ounce. Fortunately, our platinum project has estimated operating costs of about 50% lower, placing the project as one of the lowest cost operations anywhere. The main influence will be to ensure that electrical power is introduced early in the development, which at present is foreseen to take 3 years to reach full production.
Q: What is the biggest misconception about the ways that mining leaders think about power?
A: I can only observe that typically we are captive to the nearest power source available, which means that such a power supplier can try and seek higher prices knowing that the mine cannot be moved. As power makes up a very large part of the operating costs of any mine, this tension must be overcome.
Q: What are you looking forward to at the Energy and Mines London Summit?
I am hoping to learn more about the cost-effectiveness of using renewables for mining. Renewables such as wind and solar do not provide steady baseload energy on their own and this means that their use requires either special situations or innovative management.