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In order to accurately communicate the value renewable facilities have, everyone must speak the same language. The first step toward accurately comparing BAU energy and NCRE is to keep other operational variables affecting the profitability of the mine constant (e.g. commodity prices, mineral ore grade and any other expenses). The second is to account for the expected increase in price for the BAU model based on international standards set by the International Energy Agency. These are the fundamentals of the methodology I employ for evaluating NCRE projects. These metrics are designed to help NCRE project proponents, mine managers, investors and directors of companies understand the projects they are working on from the same point of view. Renewable energy options in mining will grow along with the volatility of diesel prices. Demand for space and capex are the main handicaps for renewables in other industries. However, in mining, space is not an issue, and financial intelligence – by developing innovative financial models such as the one described here – transforms threats into opportunities and perceived liabilities into mining assets.
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