Africa: Fitch advises mining firms to invest in renewable energy
A report published by Fitch Solutions has indicated that due to the prevalence of off-grid remote mineral deposits in Sub-Saharan Africa, mining companies operating in the region should invest in renewable energy.
“Off-grid mines could benefit from reducing mining companies’ dependency on diesel while taking advantage of the favorable climate conditions in the area,” Fitch Solutions said.
According to the market research firm, in view of the remote location of many important mineral deposits in combination with the underdeveloped state of power and transport, mines are not connected to national or regional electrical grids.
As a result, many of these mining operations are highly dependent on diesel-generated power, which is expensive to transport and subject to significant volatility in terms of pricing, the report reads.
In various microgrid applications, renewables combined with diesel, heavy fuel oil (HFO), or gas have proven to provide reliable power supply to remote mines, Fitch said, adding that the number of remote mines that add renewables to diesel, heavy fuel oil or gas is expected to grow quickly all over Africa.
Fitch’s own forecast predicts global diesel prices to average $96.2/bbl by 2022, up from $89.6/bbl this year.