Choosing power supply goes beyond comparing tariffs. Assessing reliability, connection timing, contract terms and lifetime costs shows how different options affect mine value, funding needs and investment decisions.
A low electricity tariff can look attractive in a financial model. Its value depends on whether power is available when needed, how interruptions affect production and what the mine must spend to secure a dependable supply.
Grid connection, on-site generation and hybrid systems bring different costs, obligations and operating constraints. Comparing them requires a consistent view of the service each option can deliver over the mine’s life.
Three questions help frame the decision:
- What is the full cost of supply? Include connection infrastructure, generation and storage, fuel, maintenance, backup capacity and equipment replacement. Contract terms also matter, including tariff escalation, minimum payments and currency exposure.
- Can supply support the mine plan? Test connection dates, available capacity and reliability against construction, commissioning and production requirements. A cheaper option may lose its advantage if it delays first production or constrains output.
- How does the option change value and funding needs? Compare upfront investment, ongoing payments and exposure to disruptions. An option that reduces initial capital may create longer-term commitments or limit flexibility if production changes.
The preferred solution may also change with mine life, expansion plans or the timing of grid access. Testing these alternatives helps identify where additional investment in reliability creates value and where contractual commitments introduce material exposure.
Minesmart Partners evaluates power options within the mine’s economics, connecting supply costs, reliability and commercial terms to project value and the investment decision.
