Mining companies are gluttons when it comes to energy use as they haul, grind and process ore, but soaring costs and environmental concerns have many turning to cleaner alternatives.
With energy now representing about 25 per cent of production costs, more companies are making huge long-term investments in wind, solar and other renewable energy projects to cut expenses and clean up their operations.
Companies such as Barrick Gold Corp., Teck Resources Ltd. and Rio Tinto PLC have ambitious wind-farm projects under way that will reduce energy costs and provide the much-needed social benefit of showing the communities where they work that progress is being made to reduce their environmental footprint.
The investments are being made even as governments are still trying to figure out ways to reduce carbon emissions and regulate the industry through measures such as carbon taxes and credits.
Barrick Gold Corp, the world's largest gold miner, is pushing ahead with alternative energy projects, and this week will inaugurate its $70-million Punta Colorada wind operation, the first wind farm built by a mining company in Chile.
The site has 10 turbines now generating 20 megawatts of energy, with capacity to expand to 18 turbines and produce 36 megawatts of electricity, or enough power for 20,000 homes.
The operation connects to a power substation that supplies energy to Chile's national power grid. Barrick is credited for the power it contributes to the system.
"It's a good opportunity for our guys in South America to get first-hand experience with what it takes to operate wind farms long-term," said Bill Williams, Barrick's vice-president of environment.
"Our position right now as a company is really one of looking at the future, trying to understand a bit about where the energy market is going, but also trying to understand where government is taking us regarding climate change ... It's a rather complex playing field for us right now."
The Chilean wind farm will also help Barrick evaluate whether that type of alternative energy project makes the best economic sense.
"What we really want to understand is, long term, after the subsidies are all withdrawn and the energy price normalizes in some places, it gives us a sense of where those technologies fit on the cost curve," he said.
Barrick also has a $8.5-million wind turbine in Argentina that provides up to 20 per cent of electricity needs for its Veladero mine. At 4,110 metres above sea level in the Andes Mountains, the wind turbine is recognized by the Guinness World Records as the highest-altitude wind generator in the world.
The wind projects come alongside smaller solar and biodiesel projects Barrick is working on.
About 15 per cent of electricity use at Barrick's operations around the world comes from renewable sources, such as wind, solar and bio-fuels.
Diavik Diamond Mines Inc. announced this month it will construct a wind farm at the site of its Diavik Diamond Mine in the Northwest Territories, said to be the largest wind farm at an operating mine when the turbines start up later next year.
It will be the first large-scale wind farm in the Northwest Territories, and special technology was created to allow the wind farm to operate in –40 C temperatures on the site on East Island at Lac de Gras.
Diavik, which is owned by Rio Tinto and Harry Winston Diamond Corp., said it will build four 2.3-megawatt turbines with a capacity of 9.2 megawatts. The mine currently relies on diesel fuel, and the wind farm is expected to reduce that consumption by 10 per cent.
The wind farm will cost up to $30-million to build, but is expected to save the company about $5-million in diesel costs each year, according to Corey McLachlan, Diavik's superintendent of government and external relations.
It makes economic sense, particularly for a mine such as Diavik that doesn't operate on an electrical grid.
"Economics definitely drive it," said Mr. McLachlan. "As resource companies have to look further and further afield and move to more remote locations to access the resources, the chance of being off the grid is growing. The ability to generate power renewably, the economics of it, are probably better at remote sites."
Teck, Canada's largest diversified mining company, made its first investment in wind energy last year by partnering with Suncor in the Wintering Hills development, an 88-megawatt wind-power project with 55 turbines near Drumheller, Alta. Operations are set to begin in January.
Teck's share of the energy generated represents more than 1.5 times the annual power consumption at its Cardinal River coal operations in Alberta, according to the company's latest sustainability report. Teck will also receive carbon credits to offset emissions from the mine.