Buoyed by High Commodity Prices and Record Revenues, the Mining Industry Will Invest Billions in Renewable Energy Sources

October 12, 2012

In 2010, overall revenues for the top 40 mining companies soared to an all-time high of more than $435 billion.  The ever increasing demand for mineral resources, fueled by emerging markets, highlights the fact that maintaining the levels of needed supply will be a significant challenge in the future, and that energy will become increasingly more important for the bottom line, shareholder value, and license to operate.  Driven by these conditions, the international mining industry is embarking on a period of transition in the way it uses and acquires energy and, more importantly, how the industry as a whole responds to increasing energy costs, reductions in traditional energy sources, and both international and national mandates to address climate change concerns.  According to a recent report from Pike Research, a part of Navigant’s Energy Practice, mining industry investments in renewable energy will climb steadily through the remainder of this decade.

During the period from 2012 through 2020, the study concludes, mining companies will invest a total of $82.5 billion in energy conservation measures and renewable energy technologies. 

“In 2011, the top 40 mining companies on the world unfolded over $300 billion of future capital projects, including over $120 billion for 2011 alone,” says research director Kerry-Ann Adamson.  “The increased investments are expected to continue to focus on emerging markets in the near term, often in remote areas where conventional power sources are both expensive and unreliable.  With no slowdown ahead in demand for the materials needed to supply the developing and industrialized world, these capital programs will translate significantly to investments in renewable energy technologies and energy conservation.”

The attractiveness of renewable energy assets for the mining industry’s energy requirements will hinge upon both the costs of energy and the cumulative installed capacity when energy is being provided from a local grid.  In cases where renewable energy technologies are installed on-site, the mining operations will, in effect, develop localized, commercial microgrids that are designed to meet specific energy requirements for each mining facility.  An added benefit to the inclusion of renewable energy technologies in operating mines in a microgrid scenario will also be the opportunity to leverage these assets as community development programs during mine closures and reclamation activities of the individual mines.

The report, “Renewable Energy in the Mining Industry”, provides a detailed examination of energy consumption dynamics in the global mining industry, along with an analysis of the market opportunity for greater utilization of renewable energy.  The study assesses the market drivers and policy issues that are influencing mining companies’ increasing interest in renewable energy, along with a review of the technology issues associated with each option.  The strategies of key industry players are profiled in depth and market forecasts through 2020 are provided for renewable energy investment in the sector.  An Executive Summary of the report is available for free download on the Pike Research website.

Contact: Richard Martin

+1.303.997.7609

richard.martin@navigant.com

 

* The information contained in this press release concerning the report, “Renewable Energy in the Mining Industry,” is a summary and reflects Pike Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Pike Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.

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