Benchmarking the energy consumption of Canadian open-pit mines

BENCHMARKING THE ENERGY CONSUMPTION OF

CANADIAN OPEN-PIT MINES

PREPARED FOR MINING ASSOCIATION OF CANADA

AND NATURAL RESOURCES CANADA

1939B_OEE_OpenPit-c4 4/1/05 3:14 PM Page 3

Library and Archives Canada Cataloguing in Publication

Main entry under title :

Benchmarking the energy consumption of Canadian open-pit mines

Issued also in French under title: Analyse comparative de la consommation d’énergie des mines à ciel ouvert du Canada.

ISBN 0-662-39538-7 Cat. No. M144-70/2005E

1. Strip mining – Energy consumption – Canada.2. Strip mining – Energy conservation – Canada.3. Energy consumption – Canada.4. Energy conservation – Canada.5. Energy auditing – Canada.I. Canadian Industry Program for Energy Conservation.

II. Mining Association of Canada.

TN291.B46 2005 622’.292’0682 C2005-980101-8

© Her Majesty the Queen in Right of Canada, 2005

For more information or to receive additional copies of this publication, write to:

Canadian Industry Program for Energy Conservationc/o Natural Resources Canada580 Booth Street, 18th FloorOttawa ON K1A 0E4

Tel.: (613) 995-6839Fax: (613) 992-3161E-mail: [email protected] Site: oee.nrcan.gc.ca/cipec

Or

Mining Association of Canada350 Sparks St. Suite 1105Ottawa ON K1R 7S8

Tel: (613) 233-9391Fax: (613) 233-8897 Web Site: www.mining.ca

Recycled paper

1939B_OEE_OpenPit-c4 4/1/05 3:14 PM Page 4

BENCHMARKING THE ENERGY CONSUMPTION OF CANADIAN OPEN-PIT MINES

FOREWORD

IFOREWORD

On behalf of the Mining Sector Task Force of the Canadian Industry Program for EnergyConservation (CIPEC), the Mining Association of Canada (MAC) retained CorporateRenaissance Group to work with mining companies to establish energy benchmarks foropen-pit mines. Companies that participated in this project paid for the on-site services of the consultancy and have received individualized reports on the findings.

CIPEC consists of 26 task forces, representing the various industrial sectors in Canada, and is a partnership of industrial associations and the Government of Canada, representedby Natural Resources Canada’s Office of Energy Efficiency. The Mining Sector Task Forcecomprises members of MAC’s Energy Committee. CIPEC task forces act as focal pointsfor identifying energy efficiency potential and improvement opportunities, establishing sectorenergy efficiency targets, reviewing and addressing barriers, and developing and implementingstrategies to meet the targets.

This publication is one of a series of MAC publications demonstrating the mining industry’scommitment to energy conservation and the reduction of greenhouse gas emissions – acommitment essential to our common well-being. Among our members, good energypractices are simply accepted as being good business practices.

TABLE OF CONTENTS

III


TABLE OF CONTENTS

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Layout of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.1 Boundaries of the Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.1.1 Gold and Iron Ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.1.2 Oil Sands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.2 The Mining Association of Canada (MAC) Sample . . . . . . . . . . . . . . . . . . . . . . 72.2.1 Analysis: Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.2.2 Comparative Energy Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.2.3 Analysis: Open-Pit Mining Operations . . . . . . . . . . . . . . . . . . . . . . . . . 92.2.4 Analysis: Milling Operations – Gold Recovery . . . . . . . . . . . . . . . . . . . 102.2.5 Analysis: Concentrator Operations – Iron Ore . . . . . . . . . . . . . . . . . . . 122.2.6 General and Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

3. RESULTS: BENCHMARKING PARTICIPATING MINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.1 Comparative Unit Costs for Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.2 Inter-Mine Comparative Energy Costs – Total Operations . . . . . . . . . . . . . . . 173.3 Inter-Mine Comparative Energy Costs – Mining Operations . . . . . . . . . . . . . . 21

3.3.1 Total Mining Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213.3.2 Waste Rock Operations – Stages of Production . . . . . . . . . . . . . . . . . . 233.3.3 Ore Mining Operations – Stages of Production . . . . . . . . . . . . . . . . . . 283.3.4 Comparisons Based on Total Material Removed . . . . . . . . . . . . . . . . . 34

3.4 Inter-Mine Comparative Energy Costs – Mill/Concentrator Operations . . . . . 433.4.1 Total Mill/Concentrator Operations . . . . . . . . . . . . . . . . . . . . . . . . . 433.4.2 Mill/Concentrator Operations – Stages of Production . . . . . . . . . . . . . 45

3.5 General and Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

4. POTENTIAL SAVINGS: ACHIEVING BENCHMARK STANDARDS . . . . . . . . . . . . . . . . . . . . . . . 534.1 Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544.2 Potential Energy Savings: Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554.3 Potential Energy Savings: Milling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Leading Canadian to Energy Efficiency at Home, at Work and on the Road

The Office of Energy Efficiency of Natural Resources Canadastrenghens and expands Canada’s commitment to energy efficiency

in order to help address the challenges of climate change.

INTRODUCTION1

2


1 INTRODUCTION

1. INTRODUCTION

1.1 Background

Energy costs represent a significant component of the total costs of operations for Canada’smining sector. Directly and indirectly, the energy use in the mining sector is also a significantcontributor to Canada’s greenhouse gas emissions. Improving energy efficiency reducesgreenhouse gas emissions that contribute to climate changes. There are, therefore, compellingeconomic and environmental reasons for mining and milling operations to examine theirenergy consumption comprehensively.

The Mining Association of Canada (MAC) has sponsored this energy benchmarking project.The focus is a detailed comparison of the energy consumption for open-pit mining andconcentration activities. The Office of Energy Efficiency of Natural Resources Canada(NRCan) has provided assistance for this study, which is a part of NRCan’s ongoing effortsto promote more efficient energy use in Canada.

1.2 Focus

The focus of this analysis is the mining and concentration operations of open-pit mines ofMAC members. Nine mining/milling operations participated in the project, and the samplespecifically included the operations of gold, oil sands and iron ore establishments.

The project involved a detailed inter-facility comparison of the energy consumed in mining(drilling – transport) and concentration (crushing – tailings disposal). Approximately 25 categories of energy cost and usage information were examined.

Given the significantly different nature of the milling/concentrator operations for gold and iron ore operations, energy comparisons for these aspects of the operations have beenaggregated into larger groupings where feasible. The oil sands operations are comparedonly with regard to their mining activities.


INTRODUCTION 1

31.3 Layout of Report

We begin by outlining our methodology in Section 2. We describe our approach fordeveloping energy cost comparisons ($/kilotonne mined; $/kilotonne milled) to analysethe operations of the study participants.

Section 3 presents the results of the detailed benchmarking of energy costs and usage forthe nine participating establishments. Inter-establishment comparisons are presented at themine and mill levels, as well as at the various stages of production.

Section 4 presents results on the potential savings generated by achieving benchmark standards. Comparing the costs for each participant with those for the lowest-cost operationsproduces the estimated potential savings.

METHODOLOGY2

6


2 METHODOLOGY

2. METHODOLOGY

2.1 Boundaries of the Analysis

The focus of the analysis of comparative energy costs and usage was as follows:

2.1.1 Gold and Iron Ore

The gold and iron ore energy analysis focused on mining and milling/concentration operations.

2.1.2 Oil Sands

The oil sands energy analysis focused on the mining operations.

FOCUS OF ANALYSIS

Ongoing Exploration

Mining Concentration

Smelting,Refining, Etc.

FOCUS OF ANALYSIS

Overburden Removal

Mining HydroTransport


METHODOLOGY 2

72.2 The Mining Association of Canada (MAC) Sample

A total of nine establishments participated in this project. Each case study included anopen-pit mining facility. For seven of the nine mines, energy information was provided formilling/concentrator operations. These included four gold recovery operations producinggold bars and three iron ore operations producing concentrates.

2.2.1 Analysis: Overview

The objective of the analysis is to provide a detailed inter-facility comparison of the costper kilotonne mined and processed, split into costs per unit of energy and energy consumedper kilotonne for the following:

Open-Pit Mining

Nine mining operations will be compared – all operations, including the transport of oreto the crusher.

Milling/Concentrator Operations (Gold Recovery and Iron Ore Concentration)

The analysis will reflect comparisons of energy consumption and costs for the four goldrecovery facilities and three iron ore facilities and will include crushing, grinding and theaggregate of all production stages beyond grinding to loadout, plus process water, tailingsdisposal and support services.

A more detailed process comparison would not be meaningful due to the radically differentprocesses followed by the companies. However, a more detailed analysis of each company’smilling/concentrator processes was presented to the individual companies involved in thestudy.

In all cases, energy consumption will be based on kilowatt hour equivalents (kWhe). Theconversion factors for other categories of energy are illustrated below. These conversionsare derived from energy content factors reported in Canada’s Energy Outlook 1996–2000,Natural Resources Canada, April 1997, page D-3.

Open-Pit Operations (9 facilities)

Mill/Contractor Operations

Gold Recovery (4 facilities) Iron Ore (3 facilities)

8


2 METHODOLOGY

Table 2.1 – Conversion Factors (kWhe)

Energy Units kWhe/Unit

Diesel L 10.74

Gasoline L 9.63

Natural Gas m3 10.31

Explosives kg 1.06

Light Fuel Oil L 10.40

Bunker C Oil L 11.59

The inter-facility comparisons are based on the following unit costs and disaggregationinto components for open-pit mining and milling/concentrator facilities.

Open-Pit Mining (Gold, Iron Ore and Oil Sands)

Milling/Concentrator (Gold and Iron Ore)

Total Complex

For the total complexes, the unit energy costs and consumption will be based on a roll-upof the above. Given that some milling/concentrator operations process ore from morethan one open pit and that certain operations use different processes for different qualities/types of ore, the data for the total complex is based on:

a. the average mining energy costs and usage for the facility in the study; and

b. actual costs and usage for the energy used in milling/concentrator operations.

Given the above assumptions, the total energy costs can be subdivided to calculate the costper kilotonne milled for both gold and iron ore.

= Xkilotonne ore mined

$

kWhe

$kilotonne ore mined

kWhe[ [ [ [ [ [= Xkilotonne

ore milled

Note: One kilotonne = 2.204623 million pounds

$

kWhe

$kilotonne ore milled

kWhe[ [ [ [ [ [

NOTE: ONE KILOTONNE = 2.204623 MILLION POUNDS


METHODOLOGY 2

92.2.2 Comparative Energy Costs

Not surprisingly, average energy unit costs by source vary among the nine open-pit mines.

Energy source (e.g. electricity)

2.2.3 Analysis: Open-Pit Mining Operations

The open-pit mining operations were subdivided into 10 stages of production and threesupport activities. These categories are illustrated below.

1 9

$/kWh

Drilling

Blasting

Excavating

Transportation

Waste Rock Disposal

Waste Rock Removal

Stages of Production

Drilling

Blasting

Excavating

Ore Transport

Pit Dewatering

Ore Extraction

Support Activities

Road Maintenance

Service Equipment

Mine Support Equipment

10


2 METHODOLOGY

The total energy costs for open-pit mining operations for the nine operations were compared.

These energy costs were, in turn, subdivided into two components: $/kWhe and kWhe/kilotonne of ore mined.

Similarly, energy costs and consumption were compared for each of the nine operations bystage of production.

2.2.4 Analysis: Milling Operations – Gold Recovery

The gold recovery milling operations were subdivided into the following stages of productionand support activities.

1 9

$/kilotonne ore mined

1 9

1 9

$/kWhe

kWhe /kilotonne ore mined

Crushing

Grinding

Additional Processing of Milled Ore


Support Activities

Process Water

Tailings Disposal

Plant Services


METHODOLOGY 2

11The total energy costs for the milling process in the four gold recovery operations werecompared.

These energy costs were, in turn, subdivided into two components: $/kWheand kWhe/kilotonne ore milled.

The total energy costs were compared for each of the milling gold recovery productionstages (crushing, grinding and additional processing through to tailings treatment and disposal). In each case, the total energy costs/kilotonne milled, $/kWhe and kWhe/kilotonnemilled were compared as illustrated above for the mining operations.

1 4

$/kilotonne milled

1 4

1 4

$/kWhe

kWhe/kilotonne milled

12


2 METHODOLOGY

2.2.5 Analysis: Concentrator Operations – Iron Ore

The iron ore concentration facilities were subdivided into the following stages of productionand support facilities.

* NOTE: STUDY PARTICIPANTS FOLLOWED MATERIALLY DIFFERENT PROCESSES FOR PRODUCTION STAGES RELATED TO SEPARATION,FILTRATION AND DRYING. TO ACHIEVE MEANINGFUL COMPARISONS OF ENERGY CONSUMPTION FOR THESE STAGES, IT WAS

NECESSARY TO AGGREGATE THE DATA UNDER THE HEADING “ADDITIONAL PROCESSING” EVEN THOUGH ENERGY CONSUMPTION

FOR THESE STAGES WAS REPORTED TO THE INDIVIDUAL COMPANIES.

As in the case of the gold operations, the total energy costs per kilotonne for the threeconcentrator operations were compared. These energy costs were, in turn, divided intotheir two subcomponents: $/kWhe and kWhe/tonne processed.

The above comparisons were made for each stage of production in the concentrationprocess: crushing, grinding and separation through to tailings treatment and disposal.

2.2.6 General and Administrative

The costs for general and administrative activities were compared separately for both goldand iron ore mining. As in the case of the mining and milling/concentrator analysis, thetotal energy cost for general and administrative activities per kilotonne mined was deter-mined. This number, in turn, was broken down into its cost per kilowatt hour equivalentand the kilowatt hour equivalent per kilotonne mined.

Crushing

Grinding

Separation

Filtration

Drying

Loadout


Support Activities

Tailings Treatment

Process Water

Plant Services

Addi

tiona

l Pro

cess

ing

*

RESULTS: BENCHMARKING

PARTICIPATING MINES3

14


3 RESULTS: BENCHMARKING PARTICIPATING MINES

3. RESULTS: BENCHMARKING PARTICIPATING MINES

As mentioned above, the nine participants in the study included three iron ore mines, fourgold mines and two oil sands operations (for which only mining energy data were collected).In all cases, the mine operations reported their energy consumption and costs for the fullcalendar year 2000.

For the nine mines, total energy expenditures of $228 million were incurred for the calendaryear 2000. The most heavily used fuels were diesel (235 million litres) and electricity(2265 gigawatt hours). Together, these two energy sources accounted for more than 75 percent of the total energy (kWhe) consumed at the mines.

The mines in the sample collectively produced over 260 million tonnes of ore during 2000 and removed a comparable amount of waste rock. The volume of ore mined duringthe year varied from less than 4 million tonnes to over 60 million tonnes at the largestmine. Total material removed (ore plus waste rock) ranged from just under 20 milliontonnes to over 120 million tonnes. Stripping ratios (waste rock : ore tonnage) varied considerably, from 0.04 to 6.05. This variation has a significant influence on the costs andenergy consumption per tonne of ore mined that is reported in Sections 3.2 and 3.3 of thisstudy. In Section 3.4, however, we compare the mining operations on the basis of totaltonnage removed (ore plus waste), a comparison that removes the influence of the strippingratios on the comparisons.

The energy benchmarking results will be presented as we compare:

1. the costs across the participants for the individual energy sources;

2. the mining operations for the nine establishments; and

3. the results for the concentration operations of seven facilities.


RESULTS: BENCHMARKING PARTICIPATING MINES 3

153.1 Comparative Unit Costs for Energy

There are very significant differences between the lowest and highest unit costs reportedfor the sources of energy used at the mining operations in the study sample. As illus-trated below, the range of unit costs for each energy category is very wide (from 118 to 3 849 percent). The unit energy costs are compared in the figures below.

Figure 3.1 – Range of Unit Energy Costs

Figure 3.2 – Comparative Unit Energy Costs (CAN$)

Highest as % of Lowest

118 177 208 225 341

3 849

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Bunker C Oil

Gasoline Diesel Propane ElectricityBlasting Fuels

Electricity ($/kWh)

$/kWh

1 2 3 4 5 6 7 8 9

Diesel ($/litre)

1 2 3 4 5 6 7 8 9

$/litre

0.002 0.004

0.035 0.039 0.039 0.0420.057

0.0830.092

0.23

0.330.37 0.38 0.39 0.40

0.43 0.430.48

0.00

0.02

0.04

0.06

0.08

0.10

0.00

0.10

0.20

0.30

0.40

0.50

16



Figure 3.2 (cont.) – Comparative Unit Energy Costs (CAN$)

1 2 3 4 5 6 7 8

$/litre

Gasoline ($/litre)

Propane ($/litre)

$/litre

1 2 3 4 5 6

Blasting Fuels ($/kg of explosive)

1 2 3 4 5 6 7

$/kg

1 2 3

$/litre

Bunker C Oil ($/litre)

0.380.45

0.57 0.59 0.59 0.590.65 0.67

0.28 0.29 0.330.44

0.54

0.94

0.32 0..330.44

0.49 0.50

0.67 0.72

0.20 0.20

0.24

0.000.100.200.300.400.500.600.700.80

0.00

0.20

0.40

0.60

0.80

1.00

0.000.100.200.300.400.500.600.700.80

0.00

0.05

0.10

0.15

0.20

0.25



173.2 Inter-Mine Comparative Energy Costs – Total Operations

Sufficient information was received from seven open-pit mining operations to make compar-isons at the “total operations” level (mining and milling/concentrating costs and energyconsumption per kilotonne of ore mined or processed) and for each of the stages of pro-duction (drilling, blasting, loading/excavating, hauling, crushing, grinding, etc.). For thetwo oil sands projects in the sample, only mining data was collected. For heap leach goldmines in the sample, costs were separated for ore destined for the milling process versus oretreated on leach pads, and the “mill ore” costs are reported here.

In all cases, the energy costs were compared based on Canadian dollars per kilotonne (million kilograms1) of ore mined. These unit costs, in turn, were subdivided into an energycost component (dollars per kWh equivalent) and a usage component (kWh equivalent perkilotonne of ore mined). The energy costs for total operations represent the average costper kilotonne of ore mined plus the average cost per kilotonne of ore milled/concentrated.This concept is captured using the phrase “$ per kilotonne of ore processed” (i.e. processedin the mining and the concentrating operations). The figure below summarizes the totalenergy costs per kilotonne of ore mined and ore milled/concentrated for the seven minesthat reported all data for this study.

1 ONE TONNE (1 000 KILOGRAMS) EQUALS 2 204.6 LBS.

18



Figure 3.3 – Energy Costs: Total Operations

Energy Cost

$ per kilotonne of ore processed

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

Energy Consumption

kWhe per kilotonne of ore processed

$ per kWhe

Unit Energy Cost

639 8881 266

2 1062 855

4 165 4 482

26 917 31 414 33 065

46 27453 301

62 38771 104

0.019 0.020

0.0470.054

0.063 0.064 0.067

0

1 000

2 000

3 000

4 000

5 000

010 00020 00030 00040 00050 00060 00070 00080 000

0.000.010.020.030.040.050.060.070.08



19Figure 3.4 – Average Costs by Stage of Production

Drill

ing

Blas

ting

Exca

vatio

n Hand

ling

Drill

ing

Blas

ting Ex

cava

ting

Tran

spor

t

Dewa

terin

g

Crus

hing

Grin

ding

Othe

r Pro

cess

ing

Tran

spor

t

Min

e Su

ppor

t

Taili

ngs

Proc

ess

Wat

er

Othe

r Pl

ant

G&A

Total Mill/Concentrator Operations

Total MiningOre

Excavation

Waste Rock Removal

13.1

5

170.

52

26.5

2

116.

43

21.3

8

348.

00

5.71

182.

78

24.3

8 88.7

5

301.

62

24.4

6

46.0

7

720.

15

34.9

1

174.

41

163.

17

33.7

5

24.8

5

18.5

2

449.

61

19.5

7

1 18

9.33

Wei

ghte

d Av

erag

e $/

kilo

tonn

e

Total Operations

20



Figure 3.5 – Average Energy Consumption by Stage of Production

Exca

vatio

n

Tran

spor

t

Tran

spor

t

Proc

ess

Wat

er

Othe

r Pla

nt G &

A

Total Operations

Total Mill/Concentrator Operations

Total Mining

Waste Rock RemovalWei

ghte

d Av

erag

e kW

h e /

kilo

tonn

e

1 64

7

20 9

89

366

504 69

3

3 49

2

636

5 69

1

271

453 78

4

2 79

3

4 30

1

355 1

419

11 7

66

1 32

0

5 26

9

9 47

3 1 75

4

1 52

7 752

33 5

07

Ore Excavation

Drill

ing

Blas

ting

Exca

vatin

g

Dewa

terin

g

Crus

hing

Grin

ding

Othe

r Pro

cess

ing

Min

e Su

ppor

t

Taili

ngs

Drill

ing

Blas

ting

Hand

ling



213.3 Inter-Mine Comparative Energy Costs – Mining Operations

3.3.1 Total Mining Operations

The total energy costs for open-pit mining for the nine operations are shown below. Asillustrated, the energy costs vary from $170 per kilotonne of ore mined to $3,120 per kilotonne. The range of costs and efficiencies is as follows:

Range High : LowHigh : Low Percent

Energy Cost ($/kilotonne of ore mined) 3 120 : 170 1 830

Energy Consumption (kWhe/kilotonne of ore mined) 42 474 : 7 006 606

Unit Energy Cost ($/kWhe) 0.073 : 0.022 331

The total costs shown here cover drilling, blasting, excavating, hauling, pit dewatering, andmine support equipment, road maintenance and service equipment. Any in-pit crushing orrehandling of ore from stockpiles is excluded.

22



Figure 3.6 – Total Energy Costs: Mining Operations

Energy Cost

$ per kilotonne of ore mined

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

Energy Consumption

kWhe per kilotonne of ore mined

$ per kWhe

Unit Energy Cost

170 231527 534 552

817

1 793 1 821

3 120

7 006 7 694 8 949 10 32111 264 13 322

26 88433 855

42 474

0.0220.033

0.049 0.052 0.0530.059 0.061

0.068 0.073

0500

1 0001 5002 0002 5003 0003 500

0

10 000

20 000

30 000

40 000

50 000

0.000.010.020.030.040.050.060.070.08



233.3.2 Waste Rock Operations – Stages of Production

Drilling (Waste Rock)

The cost for waste rock drilling energy varied from $0.08 to $144.00 per kilotonne of oremined for seven drilling operations. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 144.00 : 0.08 179 800


Unit Energy Cost ($/kWhe) 0.045 : 0.002 1 858

Figure 3.7 – Drilling (Waste Rock) Energy Costs

Energy Cost


Energy Consumption

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7


$ per kWhe

Unit Energy Cost

6.00 8.00

44.00

81.00

144.00

0.430.08

35 103 177 200

1 2081 806

3 618

0.002 0.004

0.0340.037 0.039 0.040

0.045

0

30

60

90

120

150

0500

1 0001 5002 0002 5003 0003 5004 000

0.00

0.01

0.02

0.03

0.04

0.05

24



Blasting (Waste Rock)

The blasting energy costs for waste rock varied from $79 to $1,255 per kilotonne of oremined. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 1 255 : 79 1 588

Energy Consumption (kWhe/kilotonne of ore mined) 1 845 : 203 909


Figure 3.8 – Blasting (Waste Rock) Energy Costs

Energy Cost


1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

Energy Consumption


$ per kWhe

Unit Energy Cost

0

300

600

900

1 200

1 500

0

500

1 000

1 500

2 000

0.00.10.20.30.40.50.60.70.8

79 84 101205 239

516

1 255

203 217425 535

1 2211 383

1 845

0.186 0.196

0.373 0.384 0.415 0.466

0.680



25Loading/Excavating (Waste Rock)

The energy costs for loading/excavating waste rock varied from $5 to $277 per kilotonneof ore mined. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 277 : 5 5 213



Figure 3.9 – Excavating (Waste Rock) Energy Costs

Energy Cost


Energy Consumption

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9


$ per kWhe

Unit Energy Cost

0

50

100

150

200

250

300

01 0002 0003 0004 0005 0006 0007 0008 000

0.00

0.01

0.02

0.03

0.04

0.05

0.06

5 11 14 18 2140

61

175

277

332 336 380 424 6581 089 1 140

3 750

6 209

0.0160.025

0.0320.037 0.037

0.045 0.0470.053 0.054

26



Waste Rock Transport

The energy costs for hauling waste rock varied from $18 to $887 per kilotonne of oremined. The range of costs and efficiencies is as follows:





Figure 3.10 – Waste Rock Transport Energy Costs

1 2 3 5 74 6 8 9

1 2 3 5 74 6 8 9

1 2 3 5 74 6 8 9

18 54 69 75 114 126

338

579

887

442 1 461 2 421 3 211 3 229 3 6707 577

15 817

22 307

0.021

0.0310.034 0.035 0.037 0.037

0.040 0.0400.045

0

200

400

600

800

1 000

0

5 000

10 000

15 000

20 000

25 000

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



27Waste Rock Handling

The energy costs for handling waste rock after transport varied from $7 to $78 per kilotonneof ore mined. The range of costs and efficiencies is as follows:





Figure 3.11 – Waste Rock Handling Energy Costs

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

7 10 1319 23

29 3239

78

298 337 345538 567

7361 036 1 079

1 743

0.021

0.0310.034 0.035 0.037 0.037 0.040 0.040

0.045

01020304050607080

0

500

1 000

1 500

2 000

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

28



3.3.3 Ore Mining Operations – Stages of Production

Drilling (Ore)

The drilling energy costs varied from $0.13 to $29.00 per kilotonne of ore mined forseven drilling operations. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 29.00 : 0.13 21 969

Energy Consumption (kWhe/kilotonne of ore mined) 641 : 54 1 191


Figure 3.12 – Drilling (Ore) Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

2.007.00 7.00

10.00

24.00

29.00

0.13

54185 217

281385

599 641

0.002 0.004

0.034 0.037 0.039 0.0400.045

0

5

10

15

20

25

30

0100200300400500600700800

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



29Blasting (Ore)

The energy costs for blasting ore varied from $56 to $208 per kilotonne of ore mined.The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 208 : 56 374

Energy Consumption (kWhe/kilotonne of ore mined) 520 : 284 183


Figure 3.13 – Blasting (Ore) Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

5697

164183 186

202 208

284 305353

482 488 492 520

0.186 0.196

0.372 0.386 0.415 0.466

0.680

0

50

100

150

200

250

0

100

200

300

400

500

600

0.000.100.200.300.400.500.600.700.80

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

30



Loading/Excavating Ore

The energy costs for loading/excavating ore varied from $10 to $98 per kilotonne of oremined. The range of costs and efficiencies is as follows:





Figure 3.14 – Excavating (Ore) Energy Costs

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1017 22 22

29 34 35

62

98

407 461 621 726 857 938 1 061

1 658

2 201

0.014

0.0260.033

0.037 0.037 0.0370.045 0.047

0.053

0

20

40

60

80

100

0

500

1 000

1 500

2 000

2 500

0.00

0.01

0.02

0.03

0.04

0.05

0.06

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



31Ore Transport

The energy costs for hauling ore to the crusher or stockpile varied from $50 to $162 perkilotonne of ore mined. The range of costs and efficiencies is as follows:





Figure 3.15 – Ore Transport Energy Costs

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

5063

88 89120 121

135 135162

2 020 2 231 2 316 2 3592 687

3 4173 933 4 106

4 432

0.021

0.031 0.033 0.034 0.035 0.037 0.0370.040

0.045

0

50

100

150

200

0

1 000

2 000

3 000

4 000

5 000

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

32



Mine Dewatering

The energy costs for mine dewatering varied from $0.00 to $454.00 per kilotonne of oremined. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore mined) 454.00 : 0.00 n/a

Energy Consumption (kWhe/kilotonne of ore mined) 4 920 : 0 n/a

Unit Energy Cost ($/kWhe) 0.092 : 0.000 n/a

Figure 3.16 – Mine Dewatering Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

0

100

200

300

400

500

0

1 000

2 000

3 000

4 000

5 000

0.00

0.02

0.04

0.06

0.08

0.10

5.00 6.00 12.00

454.00

1.020.990.00

0 73 131 247 301 414

4 920

0.000 0.002 0.004

0.039 0.039

0.0830.092

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



33Mine Support Equipment and Services

This category includes energy consumption reported by participants for mine supportequipment, road maintenance and service equipment and facilities. The energy costs for variousmine support equipment and services ranged from $12 to $280 per kilotonne of ore mined.The range of costs and efficiencies is as follows:





Figure 3.17 – Mine Support Equipment and Services Energy Costs

1 2 3 4 5 6 7 8 9

12 2946 46 56 70 86 97

280

0

50

100

150

200

250

300

1 2 3 4 5 6 7 8 9

0.0170.021

0.0290.034

0.0380.043 0.043

0.047 0.048

1 2 3 4 5 6 7 8 9

549 6891 211 1 347 1 815 2 014

2 4083 365

6 463

01 0002 0003 0004 0005 0006 0007 0008 000

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

0.00

0.01

0.02

0.03

0.04

0.05

34



3.3.4 Comparisons Based on Total Material Removed

Drilling

The drilling energy costs varied from $0.13 to $29.00 per kilotonne of material removed(ore plus waste rock) for seven drilling operations, as illustrated below. The range of costsand efficiencies is as follows:


Energy Cost ($/kilotonne of material removed) 29.00 : 0.13 21 969

Energy Consumption (kWhe/kilotonne of material removed) 641 : 55 1 173


Figure 3.18 – Drilling Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

0

5

10

15

20

25

30

0100200300400500600700800

0.00

0.01

0.02

0.03

0.04

0.05

2.007.00 7.00

10.00

24.00

29.00

0.13

55

184 217281

468598 641

0.002 0.004

0.034 0.037 0.039 0.0400.045

Energy Cost

$ per kilotonne of material removed

Energy Consumption

kWhe per kilotonne of material removed

$ per kWhe

Unit Energy Cost



35The influence of the size of the mining operation on energy consumption in drilling activitiesis explored in the figure below. There appears to be a very strong relationship between thedrilling energy per kilotonne of material removed (i.e. rock broken) and the total volumeof material removed at the mine. The largest operations consume less than one half of the energy per kilotonne in drilling operations that is reported by the smaller mines in thestudy sample.

Figure 3.19 – Scale Economies: Drilling

Blasting

The energy costs for blasting varied from $56 to $275 per kilotonne of material removed(ore plus waste rock). The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of material removed) 275 : 56 494

Energy Consumption (kWhe/kilotonne of material removed) 662 : 284 233


0

250

500

750

0 100

Millions of Tonnes of Material Removed

kWh e

per

kilo

tonn

e

36



Figure 3.20 – Blasting Energy Costs

We examined the relationship between the size of the open-pit mining operations and theprice paid for blasting fuels. As indicated in the figure below, the larger operations tend tobe able to leverage their substantial requirements for blasting fuels into lower prices from suppliers.

Figure 3.21 – Economies of Scale: Purchase Price of Blasting Fuels

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

5697

164 183 187 208

275

284 305 352

486 491 520

662

0.186 0.196

0.373 0.385 0.415 0.466

0.680

0

50

100

150

200

250

300

0100200300400500600700800

0.00.10.20.30.40.50.60.70.8

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

$0.00

$0.20

$0.40

$0.60

$0.80

0 100Millions of Tonnes of Material Removed

$ pe

r kW

h e



37Material Loading/Excavating

The energy costs for loading/excavating ore and waste rock varied from $15 to $98 perkilotonne of material removed. The range of costs and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of material removed) 2 202 : 389 566


Figure 3.22 – Excavating Energy Costs

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

15 17 18 18 2229 35 36

98

389 407 455620 702

969 1 018 1 061

2 202

0.015

0.0260.033

0.037 0.0370.045 0.047 0.047

0.053

0

20

40

60

80

100

0

500

1 000

1 500

2 000

2 500

0.00

0.01

0.02

0.03

0.04

0.05

0.06

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

38



The excavating/loading operations at open-pit mines would appear to generate significanteconomies of scale. Larger mines are able to deploy extremely large and expensive (electric)shovels that would not be cost-efficient in smaller mining operations. The figure belowexamines the economies of scale reported in loading operations at the nine mines in the study.Perhaps surprisingly, the energy consumption (kWhe per kilotonne of material removed)reported for excavating operations is not much higher at the smaller mines participating inthis study.

Figure 3.23 – Economies of Scale: Excavating

Hauling

The energy costs for hauling material from the pit to the crusher, stockpile or dump variedfrom $65 to $158 per kilotonne of material removed (ore plus waste rock). The range ofcosts and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of material removed) 4 591 : 2 359 195


0

1 000

2 000

3 000


kWh e

per

kilo

tonn

e



39Figure 3.24 – Transport/Hauling Energy Costs

Hauling is another mining operation that can generate economies of scale since the largestmines are more able to use very large trucks (over 200 tons). On the basis of the data illus-trated in the figure below, however, the larger mines do not appear to be realizing any savingsin energy consumption per kilotonne of material removed compared with the smalleropen-pit mines in the study.

Figure 3.25 – Economies of Scale: Hauling

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

65 7588

112 120 138 138 147 158

2 359 2 403 2 6873 028 3 175 3 483

3 7594 360 4 591

0.021

0.0310.034 0.034 0.035 0.037 0.037

0.0400.045

0

50

100

150

200

0

1 000

2 000

3 000

4 000

5 000

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

0

1 000

2 000

3 000

4 000

5 000


kWh e

per

kilo

tonn

e

40



Mine Dewatering

The energy costs for mine dewatering varied from $0.00 to $86.00 per kilotonne of materialremoved. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of material removed) 86.00 : 0.00 n/a

Energy Consumption (kWhe/kilotonne of material removed) 928 : 0 n/a

Unit Energy Cost ($/kWhe) 0.002 : 0.000 n/a

Figure 3.26 – Mine Dewatering Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1.00 3.00 6.00

86.00

0.980.610.00

0 34 40144

236 256

928

0.000 0.002 0.004

0.039 0.039

0.0830.092

0

20

40

60

80

100

0

200

400

600

800

1 000

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



41Mine Support Equipment and Services2

The energy costs for various mine support equipment and services ranged from $6 to $44 per kilotonne of material removed. The range of costs and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of material removed) 2 078 : 301 691


Figure 3.27 – Mine Support Equipment and Services Energy Costs

2 THIS CATEGORY INCLUDES ENERGY CONSUMPTION REPORTED BY PARTICIPANTS FOR MINE SUPPORT EQUIPMENT, ROAD

MAINTENANCE AND SERVICE EQUIPMENT AND FACILITIES.

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

6

16 16

25 2634 35

4044

301 342 373527 666

9171 150 1 291

2 078

0.0170.021

0.0290.034

0.0380.043 0.043

0.047 0.048

0

10

20

30

40

50

0

500

1 000

1 500

2 000

2 500

0.00

0.01

0.02

0.03

0.04

0.05

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

42



Total Mining Costs per Kilotonne Removed

The total energy costs for mining operations ranged from $89 to $483 per kilotonne ofmaterial removed. The range of costs and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of material removed) 8 035 : 3 231 249


Figure 3.28 – Total Mining Costs

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

1 3 5 7 92 4 6 8

0

100

200

300

400

500

0

2 000

4 000

6 000

8 000

10 000

0.000.010.020.030.040.050.060.070.08

89 107

312 322 324381

439 456 483

3 2314 030

5 924 5 982 6 108 6 161 6 441 6 5818 035

0.0220.033

0.048 0.052 0.0540.060 0.062

0.069 0.074

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



43The effect of economies of scale on the energy consumption in total mining operationswithin the nine mines in the study is shown in the figure below. The two largest opera-tions, the oil sands operations, which have no drilling or blasting operations, recorded thelowest energy consumption per kilotonne of material removed. There was, however, littleevidence of any economies of scale for energy consumption among the seven “hard rock”open-pit mines in the study.

Figure 3.29 – Economies of Scale: Total Mining Energy

3.4 Inter-Mine Comparative Energy Costs – Mill/Concentrator Operations

3.4.1 Total Mill/Concentrator Operations

The total energy costs for open-pit mining for seven operations are shown below. As illus-trated, the energy costs vary from $105 per kilotonne of ore processed to $2,367 per kilotonne.The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore processed) 2 367 : 105 2 254

Energy Consumption (kWhe/kilotonne of ore processed) 35 701 : 13 144 272


0

3 000

6 000

9 000


kWh e

per

kilo

tonn

e

44



The total costs shown here cover crushing, grinding, all other concentration, extractionand recovery operations, tailings treatment, process water supply, and other plant energy.Any in-pit crushing has been included with the primary crushing operations at the mill.

Figure 3.30 – Total Energy Costs: Mill/Concentrator Operations

1 2 4 5 63 7

1 2 4 5 63 7

1 2 4 5 63 7

105353 431

9601 209

1 523

2 367

13 144

21 229 21 29823 811 24 540

28 449

35 701

0.005 0.010

0.0330.039

0.051

0.0720.083

0

500

1 000

1 500

2 000

2 500

05 000

10 00015 00020 00025 00030 00035 00040 000

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



453.4.2 Mill/Concentrator Operations – Stages of Production

Crushing

Energy costs for crushing ore varied from $2 to $160 per kilotonne of ore processed forseven operations. The range of costs and efficiencies is as follows:


Energy Cost ($/kilotonne of ore processed) 160 : 2 8 126



Figure 3.31 – Crushing Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

2 3

39 4660

79

160

253 427 561

1 065

1 9452 358

2 804

0.003 0.008

0.0250.041

0.057

0.0830.092

0

50

100

150

200

0

500

1 000

1 500

2 000

2 500

3 000

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

46



Grinding

Energy costs for grinding ore varied from $6 to $1,507 per kilotonne of ore processed.The range of costs and efficiencies is as follows:





Figure 3.32 – Grinding Energy Costs

1 2 3 4 65 7

1 2 3 4 65 7

1 2 3 4 65 7

6 21 139

582 603 698

1 507

2 639 3 6204 957

7 280

12 23214 930

16 320

0.002 0.004

0.039 0.039

0.057

0.0830.092

0

500

1 000

1 500

2 000

0

5 000

10 000

15 000

20 000

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



47Crushing and Grinding Combined

Energy costs for crushing and grinding combined varied from $10 to $1,547 per kilotonneof ore processed. The range of costs and efficiencies is as follows:





Figure 3.33 – Crushing and Grinding Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

10 23199

649 661859

1 547

3 7045 210 5 978

7 842

15 03516 747 16 874

0.003 0.005

0.033 0.039

0.057

0.0830.092

0

500

1 000

1 500

2 000

0

5 000

10 000

15 000

20 000

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

48



All Other Mill/Concentrator

This category of mill/concentrator costs aggregates energy consumed in the separation,filtering and drying processes for iron ore mines, and included in the separation are carbon-in-leach (CIL) and carbon-in-column (CIC) circuits, stripping, electrowinning andrefining operations at gold mines. These costs varied from $45 to $753 per kilotonne ofore processed. The range of costs and efficiencies is as follows:





Figure 3.34 – Energy Costs: All Other Processing

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

45107 129 170

327

623

753

2 744 4 480 4 6508 666 9 331 10 827

26 105

0.0050.013

0.0290.037 0.039

0.067 0.070

0100200300400500600700800

0

5 000

10 000

15 000

20 000

25 000

30 000

0.000.010.020.030.040.050.060.070.08

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



49Tailings Treatment

Energy costs for tailings treatment varied from $5 to $100 per kilotonne of ore processed.The range of costs and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of ore processed) 2 261 : 245 924


Figure 3.35 – Energy Costs: Tailings Treatment

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

5 923

4958

85100

245

1 0231 261

1 5031 751

2 0492 261

0.002 0.004

0.039 0.039

0.057

0.0830.092

0

20

40

60

80

100

0

500

1 000

1 500

2 000

2 500

0.00

0.02

0.04

0.06

0.08

0.10

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

50



Process Water Supply

Energy costs for process water supply varied from $5 to $90 per kilotonne of ore processed.The range of costs and efficiencies is as follows:





Figure 3.36 – Process Water Supply Energy Costs

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

0

20

40

60

80

100

0

500

1 000

1 500

2 000

2 500

0.00

0.02

0.04

0.06

0.08

0.10

5 7 820

3046

90

79

518 523

1 089 1 182

1 9782 249

0.002 0.004

0.039 0.039

0.057

0.0830.092

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost



51Other Plant Energy

Other plant energy costs varied from $5 to $123 per kilotonne of ore processed. The rangeof costs and efficiencies is as follows:



Energy Consumption (kWhe/kilotonne of ore processed) 3 326 : 552 603


Figure 3.37 – Other Plant Energy Costs

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

520

3851

76

123

552

1 3821 852 2 013

3 143 3 326

0.004 0.006

0.0270.038 0.039

0.069

0

30

60

90

120

150

0500

1 0001 5002 0002 5003 0003 500

0.000.010.020.030.040.050.060.070.08

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

52



3.5 General and Administrative

The total energy costs for general and administrative operations for seven operations areshown below. As illustrated, the reported energy costs vary from $1 per kilotonne of oremined to $153 per kilotonne. The range of costs and efficiencies is as follows:





The total costs shown here cover energy consumed in operating guardhouses, parking lots,assay laboratories, camps, etc.

Figure 3.38 – General and Administrative Energy Costs

1 2 3 4 65 7

1 2 3 4 65 7

1 2 3 4 65 7

0

50

100

150

200

0

1 000

2 000

3 000

4 000

5 000

0.00

0.01

0.02

0.03

0.04

0.05

0.06

5 7 1730

74

153

1

83 252 451 5031 236

1 877

4 818

0.004 0.006

0.0320.039 0.039

0.055 0.059

Energy Cost


Energy Consumption


$ per kWhe

Unit Energy Cost

POTENTIAL SAVINGS:

ACHIEVING BENCHMARK

STANDARDS4

54


4 POTENTIAL SAVINGS: ACHIEVING BENCHMARK STANDARDS

4. POTENTIAL SAVINGS: ACHIEVING BENCHMARK STANDARDS

4.1 Context

In this section, we present some general estimates of potential energy savings from attainingthe performance of the most energy-efficient operations. To determine the related potentialcost savings, we used weighted average costs for each source of energy.

It should be noted, however, that the potential savings identified may not be realizable fora number of practical reasons. For example, savings may be related to economies of scaleor the nature of the ore body, or customer requirements may dictate the use of a particulartechnology precluding the use of a more energy-efficient technology.

At the same time, there may be some offsetting arguments regarding the size of the potentialsavings when considering the following:

• There are opportunities for improvement in the lowest-cost, most efficient facilities. Thefact that different firms lead in different stages of production provides even more evidenceof the potential.

• There could be operations outside the study sample that have lower-cost, more efficientoperations.

In light of the above observations, we present below a simplistic estimate of the potentialsavings achievable if each participant were to attain the most efficient level of energy con-sumption for each stage of production, using average energy source prices.


POTENTIAL SAVINGS: ACHIEVING BENCHMARK STANDARDS 4

554.2 Potential Energy Savings: Mining

Mining Operations (Material Removed)

Weighted Lowest Savings Average Total TotalAverage kWhe/kt kWhe/kt $/kWhe kt Savings kWhe ($M)

Drilling 291 55 236 0.031 326 2.4

Blasting 448 284 104 0.034 326 18.2

Loading 707 389 318 0.036 533 6.1

Transport 3 258 2 359 899 0.033 533 15.8

Support 704 301 403 0.032 533 6.9

Total 49.4 (36%)

With respect to mining operations, potential identified energy savings represent a cost savingof about $49 million, or approximately 36 percent.

4.3 Potential Energy Savings: Milling

Iron Ore Concentration


Crushing 1 282 253 1 029 0.021 95 018 2.0

Grinding 3 983 2 639 1 344 0.017 95 018 2.2

Further 10 008 4 480 5 528 0.013 95 018 6.8Processing

Tailings 1 857 1 503 354 0.015 95 018 0.5

Process Water 1 692 1 182 510 0.014 95 018 0.7

Other 2 730 1 382 1 348 0.006 55 101 0.4

Total 12.7 (47%)

With respect to iron ore concentration operations, potential energy savings identified areabout $13 million, or approximately 47 percent.

56


4 POTENTIAL SAVINGS: ACHIEVING BENCHMARK STANDARDS

Gold Milling


Crushing 1 549 427 1 122 0.054 15 783 1.0

Grinding 13 009 7 280 5 729 0.063 15 783 5.7

Further 6 248 2 744 3 504 0.058 15 783 3.2Processing

Tailings 1 131 245 886 0.057 15 783 0.8

Process Water 538 79 459 0.063 15 783 0.5

Other 2 029 552 1 477 0.038 15 783 0.9

Total 11.9 (53%)

With respect to gold milling operations, potential energy savings identified are in the orderof $12 million, or approximately 53 percent.

To sum up, potential annual energy savings identified with the most efficient operation foreach production stage as the benchmark are about $74 million (about one third of totalenergy costs), as applied to the nine study participants.

On a cautionary note, we should point out that these savings are hypothetical and may notbe achievable owing to circumstances faced by each mine, i.e. the nature of the ore body,technology employed, long-term contractual obligations, etc.

Benchmarking the energy consumption of Canadian open-pit mines

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