Rio Tinto mines go green in Madagascar

From the newsletter

Renewable energy provider CrossBoundary Energy has joined forces with mining giant Rio Tinto to power its mining operations in Madagascar with solar and wind energy.  The initial phase of the project, providing 8 MW of power, is already complete. Phase two will add 22 MW of solar and wind energy.

• This phase of the project will include the expansion of the solar farm by 6MW and the construction of a 19-turbine wind farm with a capacity of 16MW.

• Rio Tinto’s shift to green mining is expected to reduce carbon emissions by approximately 26,000 tonnes annually and decrease heavy fuel oil consumption by 8,500 tonnes per year.

More details

• Over the past five years, green mining has garnered significant attention from energy companies across Africa. For instance, renewable energy providers such as Total Eren and Chariot Energy partnered with First Quantum Minerals (FQM) in 2022 to construct a 430 MW solar and wind energy facility in Zambia. Other mining companies embracing similar initiatives include titanium dioxide producer Tronox, Seriti Resources, Richards Bay Minerals, and African Rainbow Minerals.

• While the initial cost of establishing solar and wind farms is high, mining companies are financially equipped to fund these projects due to their substantial revenues. Furthermore, such projects can result in energy cost savings of up to 30% for mining operations, thereby improving overall efficiency. 

• Power Purchase Agreements (PPAs) can also transfer the risks associated with project development and operation to independent power producers, making renewable energy even more appealing to mining companies.

• There is considerable potential for renewable energy companies to decarbonise Africa’s mining sector, as most mining operations still rely heavily on fossil fuels. Country-specific regulations are also driving the adoption of clean energy across all sectors. For example, South Africa’s Carbon Tax Act of 2019 imposes taxes on greenhouse gas emissions, incentivising industries, including mining, to reduce their carbon footprints.

Our take

• The increasing demand for minerals and metals, coupled with the growing need for decarbonisation, presents significant market opportunities for African energy companies to develop and deliver renewable energy solutions to the mining sector. 

• Mining companies will increasingly adopt hybrid energy systems combining renewables with advanced battery storage to ensure reliable, off-grid power supply in remote locations.

• Adopting renewable energy not only demonstrates a commitment to environmental stewardship but also enhances corporate social responsibility (CSR) outcomes. These initiatives align with broader sustainability goals, as Africa’s renewable energy capacity is projected to grow from 56 GW in 2022 to 300 GW by 2030.