Solar thermal plant supplying copper mine in Chile

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Climate change affects every country and does not respect national borders, yet the greenhouse gas emissions driving climate change continue to rise. Global emissions of carbon have increased by almost 50 per cent since 1990 and grew more quickly between 2000 and 2010 than in each of the three previous decades. Climate change can disrupt national economies and affect lives, with the poorest and most vulnerable people being affected the most. All ICMM members implement the 10 principles and related position statements that underpin our Sustainable Development Framework. ICMM’s position statement on climate change commits member companies to being part of the solution.

When the UN’s Sustainable Development Goals (SDGs) officially came into force in January 2016, the nations of the world committed to mobilise efforts to end poverty, fight inequalities and tackle climate change. Business has a significant part to play, alongside governments and civil society, in creating pathways for a greener, safer and sustainable future for us all. Metals and minerals are essential to almost all aspects of everyday life; they enable farming, healthcare, communications, construction, transport and energy and water supply. And they will arguably become more important as they help to deliver the infrastructure required for a low-carbon future. This is one of a series of case studies gathered from our members to highlight how companies are working to enhance their contribution to society and help industry to manage potential adverse impacts their activities may have on the realisation of some of the SDGs.

Chile produces about a third of the world’s copper. Copper production requires a significant amount of energy: in fact, mining represents almost 30 percent of total electrical energy consumption in Chile.

Codelco’s Gabriela Mistral Division (known as ‘Minera Gaby’) is located in Chile’s Atacama desert and began copper production in 2009. In 2013, the mine inaugurated what was then the world’s largest thermosolar plant, Pampa Elvira Solar, to provide Minera Gaby with climate-friendly renewable energy for its operations.

In the wake of declining demand from China, the world’s largest copper market, companies such as Codelco have been looking for ways to supply alternative markets. By producing copper that meets European climate legislation, the investment has helped Codelco become more resilient to fluctuations in copper demand from China. 

Methodology

Pampa Elvira Solar comprises a 39,300m2 area of solar thermal panels, laid out in the shape of Codelco’s corporate logo. The array can substitute for about 80 percent of the fossil fuel used in electrowinning, saving up to 6,500 tons of diesel a year. 

By burning less diesel, Minera Gaby has cut back its CO2 emissions by nearly 15,000 tons a year. In addition, reducing diesel consumption avoids the annual mobilization of 250 trucks that would have been required to transport the fuel.

The plant guarantees a continuous supply of energy thanks to a heat storage tank with a volume of 4,000m3 of hot water. The storage tank helps to level out daily fluctuations in solar radiation. The plant's existing diesel-powered heating system is being retained as a backup, guaranteeing a reliable supply of energy.

This project can consistently supply energy at a stable price, which allows Codelco to factor energy price stability into its long-term planning, without having to account for potential fluctuations in fuel prices.

The solar array was constructed by a Chilean-Danish alliance (Energía Llaima and Sunmark formed the company named Pampa Elvira Solar SpA), following a competitive international tender. The alliance hopes to undertake similar projects across Chile and the wider region.  This was the first heat purchase agreement (similar to a power purchase agreement) in which Pampa Elvira Solar designed, financed built and operates the solar plant and sells the heat to Codelco.

Outcomes

As a result of the solar plant, the mine not only cut back its diesel costs (saving an estimated $7m during the life of the project), but it started producing lower-carbon, premium-quality copper cathodes that are competitive in Europe, where carbon emissions are increasingly highly regulated.

As well as helping the company to build resilience in the face of fluctuating Chinese demand, the economic benefits of using a renewable heat source have been increased by a recent push from the country’s presidency to meet the country’s greenhouse gas emissions targets. For example, Chile recently introduced a tax on power generation, including a fixed cost of $5 per ton of carbon dioxide, plus a variable tax based on the pollution and environmental damage caused to communities where power plants are located.

The project offered a boost to those advocating for greater carbon emission regulations in Chile while also providing incentives for other large heat users to switch to renewable sources. Several civil society groups have pointed out that a major investment in renewable energy from a relatively conservative sector such as mining will have positive ripple effects across Chile as it transitions to a lower-carbon future. 

ICMM members supporting the SDGs