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MINE POWER Powering Up Connecting to the grid is any large mining project's ultimate power-supply goal, but when that isn't possible—either temporarily or permanently—diesel genset systems offer many flexible solutions By Russell A. Carter, Managing Editor Turn a famous political saying head-fortail, and you end up with "power is money"—which just happens to be a fairly concise description of the relationship between a mining project's chances for success and its ability to obtain a reliable supply of electricity. Electrical power for crucial mine operations, regardless of whether it comes from a national grid, a captive generating plant or a bank of diesel generator sets, is rarely cheap. Yet, without a dependable power supply, mines have little chance of sustained profitable operation. Tweaking the power-to-profit equation is an important process in any significant greenfield or brownfield mine/plant development effort. A recent study confirms that the mining industry has adopted two primary solutions for obtaining electricity for its projects, depending on the power situa- tion in the region, project energy demand, and its distance from the grid1: • When sourcing from the grid is too expensive or when there is no grid, industry finances and builds its own facilities or sources from a private power producer. • When sourcing from the grid is less expensive than own generation, industry either sources from the grid or finances/co-finances an upgrade of the utility's power assets. On the project side of any major power arrangement decision, major considerations can include location, the type of mine (surface or underground), commodity being mined, configuration of the production fleet, and method of benefici1 Toledano, O., "Leveraging the mining industry's ener- gy demand to improve host countries' power infrastructure," working paper, Vale Columbia Center on Sustainable International Investment, 2012. Wärtsilä says its 50DF dual-fuel diesel can burn natural gas, light fuel oil or heavy fuel oil—and can switch from gas to LFO/HFO and back smoothly during operation. The 50DF is rated at a maximum mechanical output of 17,100 kW; engine speed is 500 to 514 rpm for use with 50- or 60-Hz applications. www.e-mj.com ation, to name just a few—with the power needs and/or costs of off-grid site sites, underground operations, hardrock metal mining and processing, for example, usually eclipsing that of their surface-mine, soft-mineral, on-grid counterparts. On the supply side, issues—again, just to name a few—can range from the vastly dissimilar rates and time frames in which mine project planning vs. government or power-utility planning occur, and the sometimes conflicting power requirements for mine vs. regional needs and resources; to competitive-advantage considerations and investor acceptance or reluctance to provide funding for generation facilities that would provide service beyond the specific needs of the project. When these issues don't get resolved in a timely manner, the results can be catastrophic to a project's schedule and profitability. Throughout 2012, for example, the $6.6-billion Oyu Tolgoi copper and gold project in Mongolia was caught in a 'power' struggle of a different nature as Mongolian and Chinese authorities argued over a suitable agreement to provide electrical power to the project, which couldn't be served adequately by the Mongolian grid and was counting on obtaining on a high-voltage link from China for its permanent power. As the stalemate dragged on into the final months of 2012, project shareholder and manager Rio Tinto faced the prospect of either building its own power plant—a costly alternative that would have delayed the project's scheduled 2013 production start—or standing pat and incurring an estimated daily loss of $8.4 million from delayed copper and gold production revenues. In the meantime, it scrambled to fill the fast-tracked project's escalating power needs by arranging for additional diesel generator sets to supplement the interim power supply. Finally, in early November the company confirmed that a power purchase agreement had been reached to supply MARCH 2013 • E&MJ; 59