- Home
- Topics
- Shared Use of Extractive Infrastructure and Resource Corridors
- Sharing Energy
- Understanding What is at Stake
Understanding What is at Stake
At a Glance
-
Assessing a country’s institutional gaps and infrastructure status is important in order to identify the most realistic scenarios for synergies with extractive industry, and the steps needed to achieve them.
-
Extractives’ power requirements depend on the commodity and, even more, on the processing involved.
-
Power costs can constitute between 10% and 25% of a mine’s operational costs. The more power-intensive the operation, the more extractive companies will look to source inexpensive power.
Key Resources
- A Framework to Approach Shared Use of Mining-Related Infrastructure (Nicolas Maennling, Alpa Shah, Sophie Thomashausen, Perrine Toledano)
- Leveraging the Mining Industry's Energy Demand to Improve Host Countries' Power Infrastructure (Perrine Toledano)
Topic Briefing
An important first step toward sharing power infrastructure is to assess how a proposed or existing extractive industry site is powering it operations, and why it chose that particular arrangement.At the two opposite ends of the spectrum, extractive companies are either completely self-sufficient or source all their power from national infrastructure. Or they might be in an arrangement somewhere in between the two. Next, it is important to assess the country’s own infrastructure needs and institutional gaps in order to identify the most realistic opportunities for synergy and the steps needed to achieve them.
The type of power sourcing arrangement will also be influenced by the type of extractive operation. Power requirements depend on the commodity and, even more, on the processing involved. Aluminum smelting is a very power-intensive operation whereas coal, iron ore, platinum, or gold mining require less power. Power costs can constitute between 10% and 25% of a mine’s operational costs, and the more power-intensive the operation, the more companies will look to source inexpensive power.
Figure 1 outlines what factors influence an extractive industry site’s choice of self- generation or grid-sourced power. Based on an understanding of the needs of an extractive project, policy makers can consider what opportunities for sharing may exist.
Figure 1: Factors that influence extractive industries to choose self-generation or grid-sourced power, reprinted from Toledano et al., A Framework to Approach Shared Use of Mining-Related Infrastructure (New York: Columbia Center on Sustainable Investment, 2014).