Search results for: J. C. Bongaerts

Authors: I. Inthanongsone, C. Drebenstedt, J. C. Bongaerts, P. Sontamino

Abstract:

The major concern in evaluating the value of mining projects related to the deficiency of the traditional discounted cash flow (DCF) method. This method does not take uncertainties into account and, hence it does not allow for an economic assessment of managerial flexibility and operational adaptability, which are increasingly determining long-term corporate success. Such an assessment can be performed with the real options valuation (ROV) approach, since it allows for a comparative evaluation of unforeseen uncertainties in a project life cycle. This paper presents an economic evaluation model for open pit mining projects based on real options valuation approach. Uncertainties in the model are caused by metal prices and cost uncertainties and the system dynamics (SD) modeling method is used to structure and solve the real options model. The model is applied to a case study. It can be shown that that managerial flexibility reacting to uncertainties may create additional value to a mining project in comparison to the outcomes of a DCF method. One important insight for management dealing with uncertainty is seen in choosing the optimal time to exercise strategic options.

Keywords: DCF methods, ROV approach, system dynamics modeling methods, uncertainty

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Authors: Kateryna Zharan, Jan C. Bongaerts

Abstract:

Mining operations are energy intensive, and the share of energy costs in total costs is often quoted in the range of 40 %. Saving on energy costs is, therefore, a key element of any mine operator. With the improving reliability and security of renewable energy (RE) sources, and requirements to reduce carbon dioxide emissions, perspectives for using RE in mining operations emerge. These aspects are stimulating the mining companies to search for ways to substitute fossil energy with RE. Hereby, the main purpose of this study is to present the survey research assessment in matter of finding out the key issues related to the integration of RE into mining activities, based on the mining and renewable energy experts’ opinion. The purpose of the paper is to present the outcomes of a survey conducted among mining and renewable energy experts about the feasibility of RE in mining operations. The survey research has been developed taking into consideration the following categories: first of all, the mining and renewable energy experts were chosen based on the specific criteria. Secondly, they were offered a questionnaire to gather their knowledge and opinions on incentives for mining operators to turn to RE, barriers and challenges to be expected, environmental effects, appropriate business models and the overall impact of RE on mining operations. The outcomes of the survey allow for the identification of factors which favor and disfavor decision-making on the use of RE in mining operations. It concludes with a set of recommendations for further study. One of them relates to a deeper analysis of benefits for mining operators when using RE, and another one suggests that appropriate business models considering economic and environmental issues need to be studied and developed. The results of the paper will be used for developing a hybrid optimized model which might be adopted at mines according to their operation processes as well as economic and environmental perspectives.

Keywords: carbon dioxide emissions, mining industry, photovoltaic, renewable energy, survey research, wind generation

Procedia PDF Downloads 330

Authors: Kateryna Zharan, Jan C. Bongaerts

Abstract:

In recent years, economic attractiveness of renewable energy (RE) for the mining industry, especially for off-grid mines, and a negative environmental impact of fossil energy are stimulating to use RE for mining needs. Being that remote area mines have higher energy expenses than mines connected to a grid, integration of RE may give a mine economic benefits. Regarding the literature review, there is a lack of business models for adopting of RE at mine. The main aim of this paper is to develop an optimized model of RE integration into the German mining industry (GMI). Hereby, the GMI with amount of around 800 mill. t. annually extracted resources is included in the list of the 15 major mining country in the world. Accordingly, the mining potential of Germany is evaluated in this paper as a perspective market for RE implementation. The GMI has been classified in order to find out the location of resources, quantity and types of the mines, amount of extracted resources, and access of the mines to the energy resources. Additionally, weather conditions have been analyzed in order to figure out where wind and solar generation technologies can be integrated into a mine with the highest efficiency. Despite the fact that the electricity demand of the GMI is almost completely covered by a grid connection, the hybrid energy system (HES) based on a mix of RE and fossil energy is developed due to show environmental and economic benefits. The HES for the GMI consolidates a combination of wind turbine, solar PV, battery and diesel generation. The model has been calculated using the HOMER software. Furthermore, the demonstrated HES contains a forecasting model that predicts solar and wind generation in advance. The main result from the HES such as CO2 emission reduction is estimated in order to make the mining processing more environmental friendly.

Keywords: diesel generation, German mining industry, hybrid energy system, hybrid optimization model for electric renewables, optimized model, renewable energy

Procedia PDF Downloads 313