Mining Association of Canada | 2023 Report

The Mining Association of Canada | The Canadian Mining Story: Economic Impacts and Drivers for the Global Energy Transition 2023 61 Eagle’s LaRonde complex installed a large passive solar wall to heat its mill, reducing natural gas consumption. The levelized cost of electricity for wind, solar photovoltaic, concentrated solar power and some biomass technologies has steadily decreased, enhancing their competitiveness, particularly for off-grid generation, where mining companies are reliant on diesel power. These developments are further supported by improvements in the tax treatment for the installation of these technologies, such the immediate depreciation of capital costs for renewable technologies and heavy industrial battery electric mobile equipment implemented by Finance Canada. While renewables are attractive and will continue to be deployed due to their strengths, there are important limitations that prevent them from being an energy panacea of the mining industry. Just as miners need to go where the viable mineral deposits are located, renewable energy generation is contingent on the strength and reliability of the renewable asset. Unfortunately, the two do not often coincide geographically. To date, off-grid wind deployment at remote mines in Canada has been able to displace ~10% of diesel reliance on average, with greater penetration rates internationally, particularly for solar power in sun-rich regions. In Canada, these limitations have so far prevented renewable energy generation from being a sole-source industry-wide energy solution. To overcome these geological and capacity constraints, what’s most likely is the dual application of renewable technologies with other energy solutions, such as SMRs and hydrogen applications. Carbon Capture, Utilization and Storage Carbon capture, utilization and storage (CCUS), in conjunction with Direct Air Capture, holds immense potential for reducing emissions in Canada and elsewhere. In its recent climate plan, the federal government pledged to develop a comprehensive CCUS strategy intended to “help keep Canada globally competitive in this growing industry”. Early, strategic, and substantial investments in CCUS will be necessary to ensure that GHG reduction technologies fulfill their full potential. Much work remains to be done to move these technologies down the cost curve and to facilitate their broad deployment at a scale that can match Canada’s climate policy ambitions. While capture costs today are high, costs can be lowered as more projects are brought on board and economies of scale are fully realized. Renewable energy technologies and their economics continue to improve. Renewable power is appealing to mining companies because it has the potential to reduce energy costs and environmental impacts, enhance energy security and address climate change.