Power to the Miners
Leveraging renewables for mining
Companies are looking to decarbonize their operations as the mining industry comes under greater scrutiny for its carbon emissions. Brazilian miners find themselves in a particularly good position on the energy front compared with international competitors. As the leader in renewable energy generation for electricity in the G20, with an over 90% share coming from wind, solar, and mostly hydropower, the country and the mining industry have laid a clear path to a greener future.
The renewable energy market is steadily drawing the attention of mining companies, and consulting companies are recognizing the importance of this transition for their clients. Roger Borges da Silva, regional manager of EBP Brasil, an environmental consulting firm that specializes in environmental remediation and energy transition efforts, said, “In Minas Gerais, for example, nearly all renewable solar energy projects are dedicated to supplying the mining sector directly. This clean energy does not even enter the national grid but is sold straight to mining companies.”
Illian Energias Renováveis, a solar and wind energy company founded in 2021 and part of the Electra Group, is focusing its efforts on linking mining companies to renewable energy power supply, forming long term Power Purchase Agreements (PPAs) with customers. Guilherme Zimmer, commercial director at Illian Energias Renováveis, remarked: “The synergy between renewable energy and mining is growing stronger, particularly as mining companies are increasingly more sensitive to investors and ESG demands.”
The country is blessed by geography regarding its potential renewable energy generation, evidenced by abundant hydropower capacity and sunlight for solar energy. Therefore, the challenges to the energy sector are man-made. Zimmer mentioned how struggles to upgrade energy infrastructure and ensure grid connection and transmission endure, and regulatory changes, including licensing backlogs, stymie the development of more projects. Nevertheless, renewable energy is the way forward for miners and brings commercial benefits, too. Zimmer continued: “When mining companies purchase renewable energy from renewable projects, such as solar or wind, they receive renewable energy certificates, which allow them to offset their carbon footprint and demonstrate their commitment to energy transition.”
“Clients can purchase fuel directly from us with competitive pricing and high-quality service. Mining and agribusiness are key focus areas, and we have firm contracts with companies like Ero Brasil and Aura Minerals.”
Thiago Andrade, CEO, Petrobahia
The workhorse of the Brazilian clean energy matrix remains hydropower. Brazil is the world’s second-largest producer of hydroelectricity, according to the World Economic Forum. Data from the National Agency for Petroleum, Natural Gas and Biofuels suggest that natural gas imports in 2023 fell to their lowest level in 20 years, as hydropower generation supplied the country. Nevertheless, the hydropower sector remains vulnerable to droughts and requires significant investment to maintain and improve dams built decades ago. For example, construction for the Itaipu dam, the country’s largest, began in 1971. If Brazil’s ambitions for the mining sector are to be achieved and a green energy supply is maintained, investments will have to increase.
For Pimenta de Ávila, an engineering and consulting company specialising in geotechnical and water management solutions, the hydropower industry has also been of parallel importance to mining. One significant crossover is in dam safety, as tailings dams continue to be wound down and safety measures are implemented, the company has developed a digital tool, SYSDAM, to monitor dam safety data. Discussing the hydropower sector in Brazil, Joaquim Pimenta de Ávila, CEO, said: “There are challenges, such as environmental regulations that limit the expansion of reservoirs in hydropower projects. This restriction impacts energy production and can lead to increased reliance on thermal power during periods of low water availability, counteracting the benefits of cleaner energy sources.”
Renewable energy sources are vital for Brazil's electricity generation, supporting its sustainability goals and reducing dependency on fossil fuels. For mining companies, transitioning to cleaner energy is essential, as it enhances environmental responsibility. This shift is crucial to access financing and attract capital, meeting investor demands for sustainable, ethical practices.
“We have strong relationships with major mining companies in Brazil and we are closely aligned with their long-term expansion strategies. Today we have ongoing supplies for lithium mining companies, gold and iron ore.”
Rafael Porteiro, Business Development and Marketing Director, TSEA energia
The importance of hydropower for Brazil’s energy mix is evident to Claudio Maia, CEO of Tractebel Latin America. The global engineering and consulting company has seen an uptick in demand for services related to environmental issues, as Maia suggests that the upcoming COP 30 in 2025, which will take place in Belém, is focusing the attention of mining clients on the importance of their green credentials. Maia said: “The hydropower sector in Brazil has seen no new construction for many years, with the last auction taking place 10-12 years ago. While the system may have some overcapacity, the country still needs new hydropower projects as a reliable energy source.”
The remoteness of many mining operations sometimes means companies must rely on something other than the national power grid. In this scenario, the role of fuel distributors, such as Petrobahia, is paramount. The company, which operates across 18 states in the country, has experienced rapid growth, doubling in size over the past two years. Petrobahia has turned its attention to the mining sector as an avenue for growth. Thiago Andrade, CEO of Petrobahia, said: “The mining and agribusiness sectors are our key focus areas, and we have firm contracts with various mining companies, including Ero Brasil and Aura Minerals.”
Petrobahia also invests in alternative fuel sources, recognizing their clients’ demand for lower-emission energy supplies. In addition to its natural gas offering, which includes a gas pipeline network and investments of over R$115 million to expand gas supply to Piauí and the northeast, Andrade said: “We are investing in a corn ethanol plant in Western Bahia, with the potential to produce biogas and even SAF (Sustainable Aviation Fuel). This is part of a broader strategy to invest in biofuels, which is a critical growth area for us.”
“We support grid-connected mining operations by acting as a backup when they experience significant electrical issues. We also provide power during the construction of mining facilities.”
Marco Contin, President, Aggreko Brasil
Brazil is a significant hub for Aggreko, a power generation and temperature control provider generating approximately US$250 million in revenue, and with 400 megawatts installed in the country. The company has over 600 employees in Brazil but lacks a manufacturing center here. Brazil is also home to Aggreko’s largest project worldwide, a diesel power generation contract in the Amazon region. Marco Contin, president of Aggreko Brazil, discussed the complexities of operating in that environment: “We undertook our first project in the Amazon, which involved sourcing equipment, acquiring land, and ensuring compliance with environmental standards. It is crucial to navigate land ownership complexities, where a single property can have multiple owners.”
Contin also discussed how privatization efforts in Brazil’s energy sector have led to and encouraged more investments in infrastructure upgrades, leading to electrification rates of 70%, a remarkable metric given the scale and remoteness of much of the country, and a testament to the country’s solid fundamentals for mining investments. Discussing the increasing sustainability commitments of companies across the sector, Contin said: “Four years ago, most of our business focused on diesel generation. Now, approximately 70-80% is shifting toward gas and renewable energy. We are currently looking at solar power projects in Brazil, aiming for substantial generation capacities.”
Another leading power provider for the mining industry is TSEA energia, a company that serves the power generation, transmission, distribution and industrial markets. Until 2018, it was Toshiba South America, when it was acquired by Brazilian private equity investors FRAM Capital following Toshiba’s divestment from Brazil. TSEA energia has a large manufacturing footprint in the country, with factories in Contagem, Betim and Curitiba, serving various industries, from pulp and paper to mining. Regarding TSEA energia’s exposure to mining operations, Rafael Porteiro, business development & marketing director said: “In recent years, we have seen significant growth in the lithium sector pushed by the EVs, particularly in the Vale do Jequitinhonha region, which has become a hub for lithium exploration, and it is in the same state that we have our operations, Minas Gerais. This has created new opportunities for us to supply equipment and services to companies in this sector.”
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