Dr Thomas Hillig Energy Consulting said the likes of Barrick Gold, Rio Tinto and Glencore, along with smaller fish like Tanzanian-focused gold explorer Shanta Gold, have already realised that renewable energy has become economically attractive for mines and have built their first pilot plants.
Hillig bases his argument on miners’ rising energy costs, lower commodity prices and “the threat of further stigmatisation” to suggest wind or solar power plants could have a positive, if indirect, effect on miners’ market value greater than the pure electricity cost savings.
Renewables are renowned to cost more, to say nothing of the base load power required, yet Hillig says such investments by miners could reduce energy costs and counter opposition from ecological divestment movements, such as the “Move Your Money UK” movement encouraging depositors to shift savings away from five UK banks as they support oil, gas and coal extraction.
On the investment side, the Rockefeller Brothers Fund recently joined the divestment movement that has pledged not to invest assets worth $US50 billion into fossil fuels.
While Hillig said the direct effect of such divestment was normally limited, it did pose a significant threat regarding further stigmatisation of certain segments of the mining sector, which makes it more difficult to receive credits, reduces the demand for shares, triggers new legislation and complicates permitting.
“The business case for renewable energy is normally positive for mining companies,” he said upon the release of his study on the subject based on interviews with financing, mining, and energy experts.
“Nevertheless mining companies are a long way away from making it into the US Environmental Protection Agency’s ‘National Top 100 list’ of US green power users, which is headed by progressive brands like Intel, Kohl's Department Stores, Microsoft, Google and Wal-Mart, which consume and invest into renewable energy as it is profitable and improves their standing towards consumers and financial markets.”
While the worlds of mining and renewables have been poles apart, Hillig said solar and wind prices have dropped significantly in recent years, leading many institutional investors into that space who have “professionalised” it.
“Mining companies that actively move towards renewable energy self-consumption show that they have realized that the world around them has changed and that there are threats regarding energy costs and environmental movements,” he said.
“The financial markets reward companies that do not remain captives of the past but instead are actively seeking new solutions.”
He said financial markets now interpret the use of renewable energy as a signal for a flexible and forward-looking decision-making process; so miners that are first movers in actively integrating renewables into their energy mix were considered as both progressive and better managed.
