How to mesure Renewable Energy for Mining. Case Study: Copper mine La Escondida in Chile. This case study belongs to a new website named www.renewables4mining.com (r4mining.com). It is an independent website aiming to share and transfer knowledge about the Valuation of Business Models on Renewable Energies for the Mining and Oil Industry and minimizing Peak Oil and Climate Change. This case study demonstrates that a 200 MWp PV plant could respond the 10% of electricity demand for next 25 years for the biggest copper mine in the World saving more than 700 million compared to the fossil fuel thermal plants. Furthermore it proposes new Key Performance Indicators for mining in renewables. THE APPROACH: Using a common “language” for private and public sectors, the Value proposal supported by an innovative econometric language looking for creating synergies to the whole stakeholder ecosystem including: - Mining (1) and renewable energy companies (2); shareholders (3) and equity/debt investors (4); administrations and local socioeconomic development entities (5); analysts of multilateral organizations about Climate Change (6); international agencies and professionals in charge to minimize the Peak Oil (7).

1. Ph D. Arnold
M. van den
Hurk Mir
HOW TO MEASURE
RENEWABLES FOR
MINING
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2. ¡ renewables4mining.com (r4mining.com) and renewables4oil.com
(r4oil.com) are new independent websites aiming:
To share and transfer knowledge about the Valuation of Business Models on
Renewable Energies for the Mining and Oil Industry …
… and minimizing Peak Oil and Climate Change
¡ THE PROBLEM is huge:
§ Extractive industries (mining, oil and gas) are the largest energy consumers in the
world and one of the largest generators of greenhouse gases.
§ Only Comminution process (crushing and milling) represents the 53% of mine site
energy consumption in global mining demanding up to 3% of total world
electricity production
§ This figure equals the total electricity consumption of Germany
§ Experts declare there are energy saving opportunities of 420 trillion BTUs/year in
mining crushing …
§ Which means the total energy consumption of Canada
§ Subsequent beneficiation metallurgical processes of base metals demand even
greater needs of electricity.
WHAT IS
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3. ¡ THE APPROACH: The use of the same “language” for private and public sectors. The
Value proposition is supported by an innovative econometric language looking for
creating synergies to the whole stakeholder ecosystem including:
§ mining (1) and renewable energy companies (2); shareholders (3) and equity/debt investors (4);
administrations and local socioeconomic development entities (5); analysts of multilateral
organizations about Climate Change (6); international agencies and professionals in charge to
minimize the Peak Oil (7).
---------
¡ FIRST CASE STUDY:
§ Mine La Escondida, currently the highest producing copper mine in the world with 1.72
million Tn (2012), represents around the 10% of copper mine world output and the 26% of
Chilean production.
§ In order to better understand the magnitude of this demand, let us to illustrate some
comparable data: La Escondida needs the same electricity than Sudan, higher quantity than
Ethiopia, Tanzania or Macao. Two times the electricity of Senegal, Surinam’s or Cambodia’s.
4.5 times Aruba’s needs, 7.3 times Mauritania and 15 times the electricity demand of
Afghanistan.
§ World Copper Mining electricity market demands higher amounts than Hong Kong, Singapur,
Colombia or New Zealand …
§ If we want to achieve 10% of this demand by Solar PV for La Escondida the production would
be comparable to the 6.5% of Panama’s demand or 150% of the electricity in Afghanistan.
Then we need 200 MWp PV facility to do that … let see how it works
THE VALUE PROPOSITION …
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4. ¡ 200 MW PV nominal power facility in the location implies:
§ 8.52 TWh in 25 years (341.1 GWh/year) solar electricity production
or 9.16% the total 25 years demand in current regime (ore grade).
§ A Leverage Cost of Solar Electricity of 11.57 US cents/kWh
§ 7.31 US cents/kWh to CAPEX and 4.36 for OPEX (plus financial costs)
§ And 25 years LCoE for fossil fuels of 20.56 US cents/kWh
§ Then savings would be 8.98 US cents/kWh (798.13 M USD in 25 years)
¡ The model considers a PV Capex of 1.9 USD/watt
§ Or 380 M USD in a 80%/20% - debt/equity ratio
§ Interest rate 5%, return on equity 12.5%, WACC 10.5%
§ Results on Equity IRR 24.78%; Project IRR 11.48%; NPV 140 M USD
¡ Copper production: 1.68 M TMF; 25 years: 42.05 M Copper Tn
§ Current year electricity consumption: 3.72 TWh
§ 25 years with current electricity consumption: 93 TWh (comparable
to the yearly consumption of Malaysia or two times yearly Israel)
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FIRST CONCLUSIONS: CLASSICAL KPI

5. ¡ r4m1: Mining Operational savings of 18,98 USD for every of the 42.05
million Tones (TMF) produced during 25 years
§ This KPI could be used in every step of the mining and beneficiation process
developing an specific subgroup of KPI supporting mine management scorecard
¡ r4m2: The average increase for La Escondida company value per tone
produced during 25 years is 235.55 USD
§ During year 1 is only 66.23 USD/Tn and during year 35: 438.07 USD/Tn
§ e. g. If we have a company of 100 million shares that would mean sustainable
value increase (average) of 3.96 USD/share thanks to Renewables for mining.
§ The increase of value in an stabilized year is 396.28 M USD. This value exceeds
the total investment needed for the EPC (380 M USD)!!
¡ r4m3: Rough approach: Increase of 0.35% Mining IRR thanks to the PV
facility Operation. DSCR: 1.96.
¡ r4m4: Increase tax revenue 83.1 USD/Tn; 5.58 M USD/Year
§ Increase in 25 years of 139.67 M USD which means 8.09 / inhabitant
¡ r4m5: Carbon Footprint 83.1 kg CO2 / TMF
§ 139.741 Tn CO2 / year – 3.94 Tn CO2 in 25 years
¡ R4m6: Peak Oil: 1 hour 24 minutes 7 seconds
§ Tones Oil Equivalent saved in 25 years: 733.382.
§ Savings of 4.61 M barrels in 25 years or 506 barrels of oil every day
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R4M KPI DASHBOARD

6. FIRST RESULTS: SCORECARD
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7. ¡ r4m1: USD/Tn: KPI expressing energy saving renewable energy extraction and
processing operation mining / oil per tone (mineral, ore, metal, etc.). These savings
are transformed as increase of profits, better GOP and less WACC values.
¡ r4m2: USD/share (Tn): This KPI is produced by energy saving and renewable energy
has become increasing business value for equity investors, better value generated
EBITDA, and higher rate of return, IRR.
¡ r4m3: DSCR & IRR: KPI that represents how energy savings of renewable energy can
be expressed as a better Debt Service Coverage Ratio or better IRR for the mining
company.
¡ r4m4: USD / Tn (or inhabitant): KPI that shows the increase in socio-economic
development of local communities expressed by increased tax collection pubic
administrations. This increase comes from the greatest benefits of mining
operations by the energy saved by the use of renewable energy.
¡ r4m5: Tn CO2/mineral Tn: reducing the carbon footprint comes from the partial
migration from fossil fuels to renewable energies to support the mitigation of
greenhouse gases (less tons of CO2 / tone ore or metal produced).
¡ r4m6: “Time” - Oil Tn/Mineral Tn: KPI that indicates the savings in fossil fuels by
using renewable energy. The ratio is also applied as a delay / lag phase "Peak Oil"
and its disastrous consequences.
APPENDIX: KPI - R4M
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8. Ph D. Arnold M. van den Hurk
¡ info@r4mining.com
¡ www.r4mining.com
8
THANK YOU FOR YOUR ATTENTION
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