Peñoles and Fresnillo in Favor of Green EnergyBy Karin Dilge | Wed, 02/16/2022 - 13:06
Leading companies Peñoles and its former subsidiary Fresnillo have said that renewable energy remains a key part of their strategy toward reducing their carbon footprint. Nevertheless, experts warn that the government’s proposal to reform the energy sector could hinder such sustainability efforts.
On World Energy Day, the mining giants outlined their commitment to use and produce clean energy for their operations in an effort to help mitigate climate change. Rafael Rebollar, Director General, Peñoles, said that investment in clean energy is a key component of the company’s sustainability action toward self-sufficiency and economic competitiveness. Rebollar highlighted the importance of investing in innovation and technology to boost efficiency in mining processes as it presented the company’s goals for 2028, which include running operations on 100-percent clean energy.
Meanwhile, Octavio Alvídrez, Director General, Fresnillo, highlighted the company’s “constant responsibility” to mining sustainably. The firm has the goal to reduce its negative impact on climate change and carry out a stronger strategy to diminish carbon emissions. Alvídrez, like Rebollar, emphasized the great significance of clean energy production for efficient processes to reduce mining’s environmental footprint.
Together, the companies have three wind parks located in Coahuila, Oaxaca and Tamaulipas. These three power plants generated 40 percent of Peñoles and Fresnillo’s required power in 2020. This demonstrates the effort and commitment of the companies toward more sustainable operations.
The companies have another clean energy project that focuses on the recovery of thermal energy from metallurgical processes to generate electricity in Coahuila.
According to a mining report by Fitch Solutions, decarbonization represents risks and opportunities for the entire industry. Subsectors like low-quality iron, steel and zinc are being disrupted, while access to investment is becoming more difficult for junior mining companies that struggle to implement ESG programs. However, there is opportunity in adapting: mining companies that have significantly reduced their emissions will gain access to greater investment capacity, whereas those that produce low-carbon products will benefit from a premium price as their clients strive to improve their own environmental performance. Additionally, companies producing critical materials for the battery storage revolution, such as copper, lithium and nickel, will benefit from growing demand.
The future of the Mexican mining industry is still uncertain and largely depends on the Congress’ decision over President López Obrador’s energy reform proposal, industry experts say. Among the president’s demands, CFE, a utility that relies heavily on fossil fuels, is to be guaranteed a market share of 56 percent in electricity generation, where it currently holds a 38 percent share. The reform would also grant the state exclusive control over strategic minerals like lithium.
“The electricity reform forces all productive sectors of Mexico to acquire energy from CFE, no matter how dirty, expensive or inefficient it is. The government needs to provide greater legal certainty regarding the energy reform initiative, because even without its approval, investment and projects are being lost,” said Karen Flores, Director, CAMIMEX.