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ENERGY MANAGEMENT IN THE EXTRACTIVE INDUSTRY - GHANA Edmund Yaw Hassan Torkornoo and Associates Limited (TAL) Accra Ghana www.torkornoo.com [email protected]
ENERGY MANAGEMENT IN THE EXTRACTIVE INDUSTRY -GHANA
Edmund Yaw HassanTorkornoo and Associates Limited (TAL)Accra Ghana
INTRODUCTIONExtractive industries (mining, oil and gas) are very closely associated with large energy (fuel and electricity) use.
15% and 7% of electricity production in South Africa and Ghana respectively goes to the mining companies.
There are significant environmental and financial benefits from ensuring that the use of energy is optimized.
In developing countries like Ghana, development of mineral resources directly correlates to the abundance or otherwise of energy resources.
The supply of energy to the extractive industries of Ghana and South Africa has been greatly hampered in recent years and mining companies have had to act decisively.
EXTRACTIVE INDUSTRIES OF GHANAThe extractive industries of Ghana are dominated by mining companies. Oil and gas industries are just in the offing. Among the mining industries such as manganese, bauxite, limestone and diamond, gold mining companies dominate.
MAJOR GOLD MINING COMPANIES OF GHANAThe four major gold mining companies account for over 90% of national gold output. They are:
Goldfields Ghana Limited (696,149 oz)AngloGold Ashanti (527,000 oz)Newmont Gold Ghana Limited (445,600 oz)Golden Star Resources (246,278oz)
Based on 2007 results
ELECTRIC ENERGY INSTALLED CAPACITY
MW Share (%) Total Hydro 1,180 68
Total Thermal 550 32
TOTAL 1,730
Based on 2006 figuresEnergy Commission
ELECTRIC ENERGY GENERATION CAPACITY
GWhHydro 5,619 Shares (%) 67
Thermal 2,811 Shares (%) 33
Total Generation 8,429
Based on 2006 figuresEnergy Commission
ENERGY NEEDS OF MINING COMPANIES
Mining companies use energy very intensively. Energy is requiredfrom exploration, mining, through processing and refining. In terms of electrical energy, the gold mining companies in Ghana require in excess of 120MW of energy from the nation’s electricity supplies.
NEWMONT GHANA GOLD LIMITEDNewmont is currently the third largest gold producer in Ghana. Newmont is the first large scale mine in the Brong Ahafo Region of Ghana, a region hitherto not known for its gold mining prowess. Ashanti and Western Regions have been the gold mining powerhouses of Ghana.
Newmont AngloGoldAshanti
Goldfields
ENERGY POLICY - NEWMONTNewmont’s energy policy is based on the four pillars of
Carbon policy planning & developmentGreen house emission and accountingMarket & regulatory knowledgeEnergy planning and management
Newmont feels that it has an obligation to act to minimize its carbon footprint. But Newmont also sees an opportunity in doing so. One of the most effective ways to reduce carbon emissions is to utilize energy more efficiently, which in turn reduces costs.
Beyond The Mine – 2007, Newmont
STRATEGIC ENERGY PLAN OF NEWMONT
Newmont’s Energy policy is informed by increased global warming risks.
Legislation on carbon emissions, such as a cap and trade system in US and Australia, including the imposition of a "carbon tax“ on resources such as diesel fuel and electricity.
Looking inward, physical and environmental changes due to climate change are also a risk to Newmont. Predictions of the Intergovernmental Panel on Climate Change (IPCC), raise health and welfare concerns for workforce and members of the communities in which Newmont operates. Exposure to extreme conditions of weather would lead to the spread of diseases such as malaria.
Climatic changes could also bring communities to face other hardships brought on by changes in the environment, such as shortages in water supply and impacts on agriculture
ELECTRICAL ENERGY NEEDS OF NEWMONTNewmont currently requires a maximum of 40MW of electrical energy for operations at full capacity and normal power draw of approximately 32MW at their operating plant in Ahafo. Electric power is supplied Newmont, by the Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) from the national grid.
However, the power crisis in Ghana of 2007 meant that mining companies needed to somehow secure the supply of power for their operations after supply was curtailed to all industries.
POWER CRISIS IN GHANAThe inadequacies of Ghana’s energy infrastructure and supply were brought to the fore in 2007, throwing the entire nation into darkness. Industry was the hardest hit, with power supply not even enough to run on half capacities.The mines were obviously hit hard too. They responded by puttingtogether a consortium of the four biggest gold mines to install a diesel fired power plant to generate 80MW of power.Goldfields Ghana Ltd, Anglo Gold Ashanti, Newmont Ghana Gold and Golden Star Resources were to receive 20MW of electric power each.
NEWMONT MEETS ENERGY NEEDSNewmont Gold Ghana Ltd has its own facility to generate 12MW of power at its Ahafo Mine.
20+12=32 Emergency power to run plant
ACCOUNTING FOR ENERGYNewmont Ghana is in the process of accounting for their energy usage. As a new mine, Newmont is currently developing a robust inventory management plan to account for its greenhouse gas emissions in consonance with World Business Council on Sustainable Development and the Greenhouse Gas Protocol of the World Resource Institute.The use of resources, such as energy, efficiently is the key to energy management. And this can only be achieved when energy use is adequately accounted for.In efficiency terms, it should be possible to determine how muchenergy is required for the production of an ounce of gold.
ENERGY EFFICIENCYAt AngloGold Ashanti, 4.69 gigajoules of energy was needed to produce an ounce of gold in 2006. This figure increased to 4.96 in 2007.At their Ghana operations in Obuasi and Iduapriem, energy efficiency figures were 6.90 and 4.81 gigajoules per ounce of gold produced respectively.
Obuasi is underground, and Iduapriem is surface, explaining the higher intensity of energy for Obuasi. Enormous amounts of energy are needed for ventilation and refrigeration underground.
ENERGY EFFICIENCY AND R&D AT NEWMONT
Hybrid Underground Loader – Hydrogen based fuel cell and Nickel metal-hydrite batteries
The design emits none of the particulate, carbon monoxide or other emissions common with diesel engines. It emits water underload.
This results in reduced ventilation requirements and a more safer and healthier workplace environment for employees
SOLAR AND THERMAL PUSHBoth Newmont and AngloGold Ashanti are looking at the possibilities of augmenting their energy mixes with solar power.
Newmont is experimenting with thermal energy from their Carlin operations in Nevada to dry ore. Instead of natural gas, an engineered recirculation of hot air from underground is recycledand vented to the atmosphere. This could result in annual energysavings of over $700,000 per year and reduced CO2 emissions of 5,393 metric tons per year.
EFFICIENT USE OF ENERGY
Carry out energy efficiency auditsIdentify opportunities and implement appropriate measures for
energy use reduction and efficiency e.g. Use of Variable Speed Drives
Consult with the electricity supplier in relation to tariff management and use of off-peak electricity.
Provide regular maintenance for processing plant, pumps, and boilers, etc.
Use photosensors to control and optimize use of outside lightingProvide insulation to storage bins Optimise layout and design of internal haulage routes and
processing plant
ENERGY OUTLOOK FOR GHANAConstruction of Bui Hydro electric dam – 400MW
Oil find in Cape Three Points – recoverable resource of 500mboPrivate Sector construction of thermal plants - 200MW of 560MW
from AsogliConstruction of gas pipe line from Nigeria to Ghana
These developments are part of the government’s grand scheme to ensure energy security for Ghana
Energy security means Ghana can develop other mineral resources such as processing of the nation’s vast amounts of bauxite and some iron ore.
ENGAGEMENT AND REPORTING ON ENERGYAs member of the International Council on Mining and Metals (ICMM), Global Reporting Initiative (GRI), and the United Nations Global Compact, the major gold mining companies in Ghana are committed to executing superior business practices in sustainable development, and are committed to implementing and measuring performance against ICMM's Sustainability Framework and its supporting 10 Principles of Sustainable Development.Through the GRI, energy use and efficiency by energy source are captured to help ensure efforts towards sustainability.
INVESTMENTS IN THE ENERGY SECTOR
Private sector investments in the energy sector is allowing consumers such as the mines to negotiate energy mixes and prices in an expected competitive market.
ENERGY PRICING AND REGULATION - PURCMines are in discussion with the PURC to determine the true costof electricity. Even though mines are prepared to pay competitive prices, they will prefer a good knowledge of the energy mix sold to them.
Since June 2007, cost of electricity increased by 240% , from 5 US Cents to 17 US cents
CONCLUSIONExtractive industries are intense users of energy. They consume large proportions of national electricity productions. Mining industries are beginning to be aware of their carbon footprints, and they are making efforts to face up to this. They are looking at the issue of global warming with a business sense as well, preparing to take advantage of carbon trading. To meet their energy needs, some mining firms in Ghana have come together to install thermal capacity for their specific needs. Issues of energy efficiency ought to be important for mining companies in Ghana. One can only truly succeed with global warming and climate change when energy efficiency is incorporated into the operations of industry.
