Unearthing Opportunities for Cost Savings & Emission Reductions
In both the US and Canada, a growing number of LNG projects have been implemented in the mining sector in haul truck and power generation applications. These investments are a clear sign of the value proposition offered by natural gas in this HHP segment.
While an end-user’s questions about the potential and viability of LNG to power their operations are many, and the low diesel fuel price environment undoubtedly creates additional business case and ROI challenges, progressive mining customers understand the long-term benefits of a natural gas pathway. Forward thinking end-users recognize that demonstration projects take time to assemble, implement, test and document. With diesel fuel prices likely to rise again in the year or two ahead, now is the time to be pursuing trial projects to ensure a full understanding of the opportunity, operational considerations, and other factors. It will require the next 12 to 24 months to truly study such issues and be prepared to make a larger scale transition away from traditional diesel-based operations.
Natural Gas Value Proposition
For mining customers, the elements of the value proposition offered by natural gas include:
- Lower price fuel, operations and total cost of ownership.
- Improved environmental performance, while providing diesel like performance and reliability for operations, and maintaining site productivity.
- Lower emissions of greenhouse gases, nitrogen oxides, diesel particulate matters and other pollutants.
LNG Haul Truck and Power Gen Projects
With so many benefits to converting, the acceleration of activity in this space is unsurprising. For instance, the newly developed Renard Mine, owned by Stornoway, commenced operation on July 15, 2016, with commercial production declared on January 1, 2017. In addition to being the first diamond mine in Quebec, Canada, this project is noteworthy for its massive LNG-fueled power plant. This project was unveiled at the 2015 HHP Summit, and uses seven 2.06 MW Caterpillar generators, with fuel supplied by Gaz Metro.
In September 2016, Ferus Natural Gas Fuels signed an MOU with the Vancouver-based Casino Mining Corporation, owned by Western Copper and Gold, and Selwyn Chihong Mining Group to supply LNG to mine projects in the Yukon and Northwest Territories. A new LNG production plant with 600,000 gallons per day of total capacity will be constructed in British Columbia to serve the mining operations. These LNG fueled mining projects will reduce a total of 255,000 tons of CO2 emissions compared to what would otherwise be diesel-fueled operations.
Barrick Gold converted the power plant that provides electricity to its Pueblo Viejo Mine in the Dominican Republic to LNG, where it will replace heavy fuel oil to reduce operating costs with minimal capital investment. The company additionally plans to convert the fuel supply at its lime kilns to LNG in 2017.
Wellgreen Platinum has deployed GE Jenbacher gas engines for a complete power generation and transmission network operating from a nickel-copper mining project in the Yukon Territory of Canada. Ferus supplies the LNG to power these generators, which will also allow Yukon communities to benefit from this lower-cost fuel.
Planning for Long-Term Success
In short, diesel prices are currently down but the unstable price environment, compounded by the record-low commodities prices, has mining operations across the globe primed for a fuel overhaul.
Economists agree that current prices are not sustainable and it is unlikely that they will extend far into the future. Savvy mining operations executives are turning to natural gas as a fuel that offers long-term price stability, similar operations to diesel, and environmental advantages over traditionally fueled engines.
Natural gas fuel providers like Ferus, FortisBC, Gaz Metro, and others stand ready to partner on projects and help implement full-service solutions.
For the latest information on the accelerating deployment of natural gas engines in mining operations, join us at this year’s High Horsepower (HHP) Summit, which will take place November 6-9, 2017 in Jacksonville, Florida.
Join us for the 2017 Natural Gas for High Horsepower Summit to gain insight on:
- Case studies demonstrating how natural gas is being used to deliver the power needed to run a modern mine
- Insight into key considerations for mining companies evaluating natural gas, from greenfield development projects to the conversion of existing diesel-based operations
- How ongoing environmental regulations, carbon programs, and sustainability initiatives will continue to drive investments in natural gas technologies across the mining sector
- An overview of the progressive and comprehensive training programs being implemented to ensure personnel safety and achieve operational success and maximum project results
- Innovative fuel transport methods, including ISO containers, tube trailers, and rail cars, and key decision points when choosing a fuel provider and fuel delivery method
“HHP Summit is excellent for networking — consultants, suppliers, engineering firms. It’s been very good for us.”