The Rising Cost of Energy for Mining

By: Craig Baker, Head of Power Projects Sales at Aggreko, Africa, Middle East, and Asia 

Mining operations require significant amounts of energy to power equipment, ventilation, processing, and other systems. Energy can account for 10-40% of operating costs for mines. With volatile fossil fuel prices and climbing electricity rates, energy costs have become a major pain point for industry. 

According to BDO’s 2022 Benchmarker survey, energy represented 28% of cash costs for miners in 2021, up from 22% the previous year. The average price paid for diesel fuel increased by over 30% from 2020 to 2021. Electricity prices rose nearly 9% over the same period according to the survey. These increases are putting pressure on already tight margins. 

Rising energy expenses have a cascading effect on mining economics. More capital must be allocated to cover these costs, leaving less available for exploration, equipment upgrades, or new mines’ development. To remain profitable, some mines are forced to focus efforts on only their highest-grade deposits. This diminishes reserve life and long-term sustainability. 

Aggreko has a proven history of supporting mines across Africa, the Middle East and Asia in their journey towards more sustainable power supplies. Aggreko assists mines to bypass challenges associated with unstable power and unavailable supply by creating hybrid solutions that will consistently meet power needs, without having to carry the weight of infrastructure or equipment costs. 

Aggreko is the expert in crafting bespoke hybrid power solutions tailored to the unique needs of mines. With our rich history in serving the mining industry, we understand your journey towards seamless and sustainable power. Learn more here Aggreko