Some Australian mines may incorporate solar power

March 31, 2014

Some of the largest, and most remote mines in Australia may soon be satisfying part of their energy needs through solar power.

First Solar Inc., the largest solar-panel maker in the United States told Bloomberg that it is close to announcing agreements to supply its technology to remote mining projects in Australia to help resources companies save on fuel costs.

Jack Curtis, First Solar’s Sydney-based vice president of business development for the Asia-Pacific told Bloomberg that his company expects to develop as much as 200 megawatts of capacity for the mining industry over the next three years. First Solar, based in Tempe, AZ, plans to combine solar power with diesel, he said.

“In an environment where profitability isn’t what it used to be, with the mining industry focused on cost control, the electricity that powers the mines is becoming a bigger line item, and the ability to put a dent in that and hedge against fuel price volatility is something that solars offers,” Curtis said March 28. “We expect fairly shortly to announce some pretty exciting projects in that space.”

The U.S. company is increasing efforts to install solar systems at industrial sites and warehouses as utilities demand smaller projects, and is seeking deals in other regions including Saudi Arabia, India and South America. The world’s largest mining companies, including BHP Billiton Ltd. and Rio Tinto Group, at the same time are reining in spending as a decade-long boom in metal prices wanes.

First Solar will target mining sites in Western Australia, the Northern Territory and South Australia and seek to expand as the solar industry proves that it can provide reliable supply, Curtis said, declining to name any companies.

Operators of Australian mines facing high diesel fuel costs should grow more comfortable using solar technology to generate some of their power, said Nathan Lim, who oversees A$127 million ($117 million) in assets and owns First Solar shares as manager of the Australian Ethical International Equities Trust.

“The high cost of energy at a facility in the middle of nowhere has always made it interesting to anyone offering an alternative solution,” Lim said today by phone. “The difference between today and five to 10 years ago is the reliability, and that the cost of solar has come down. It’s becoming a no-brainer for people in remote locations.”

The company identified 10.66 gigawatts of potential bookings at the end of 2013, with more than half of that opportunity outside the U.S. The shares closed on March 28 at $68.64 in New York, valuing the company at about $6.8 billion.

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