Chile Mines Turn to Renewable Energy – by Ryan Dube (Wall Street Journal – August 11, 2015)

Power-hungry operations save nearly $20 per megawatt hour using the sun and wind

CALAMA, Chile—The three industrial boilers at the state-owned Codelco mine high in the mountains here once consumed 67,000 barrels of diesel a year to turn out shiny copper sheets for export. Now, the job is powered by nearly 3,000 solar panels that take advantage of the Atacama Desert’s cloudless blue sky.

As the cost of solar and wind power declines, renewable energy has become increasingly attractive to power-hungry mining companies. Nowhere, though, is it more prevalent than in resource-rich Chile, where companies have been pioneering alternatives to conventional power after years of shouldering some of the world’s highest energy costs.

Here at the Codelco mine, named after the late Chilean poet Gabriela Mistral, a thermosolar plant run by Chile’s Energia Llaima SpA and Denmark’s Arcon-Sunmark has replaced about 80% of the diesel that Codelco previously trucked up 8,700 feet to the mine. Copper produced by Corporación Nacional del Cobre de Chile, or Codelco, the world’s biggest producer of the metal, goes to China and other global markets.

“This blue sky makes me happy,” said plant manager Rodrigo Aravena, as he inspected rows of panels, shining in the sun and installed over an area the size of eight football fields. “It means we are generating more, and it is much better for business.”

Ernst & Young recently estimated that mines in Latin America—a region that produces copper, iron ore, oil and coal used world-wide—will invest more than $1 billion in renewable energy projects by 2022, up from $37 million in 2013. Much of that development will be in this sliver of a country, which produces a third of the world’s copper.

Electricity prices for Chilean mining companies doubled in the last decade to about $100 per megawatt hour, according to the Santiago-based Mining Council industry group, an amount that is twice as much as neighboring Peru. Chile is overly dependent on energy imports, while Peru taps a large, inexpensive domestic supply of hydropower and natural gas.

Solar- and wind-power companies say they can provide power to mines for as little as $80 per megawatt hour, still costly in Peru and other countries, but competitive in Chile.

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