The need for resource extraction and processing has driven energy innovations throughout human history. In the early days, copper extraction required people to use large quantities of fire wood to heat the rocks that contained copper minerals. Then, iron extraction and processing forced people to use coal as the new heat source.
Several key energy technologies that were invented for resource extraction ended up changing the world as a whole. For example, Watt’s steam engine was invented to pump water from an underground coal mine, and it started the Industrial Revolution. The world’s first commercial AC hydroelectric plant was built by Tesla at Gold King mine in Colorado in 1890 to supply power to a mine, because the mine’s 12,000ft height made it difficult for coal to be transported there. This invention evolved in to the AC grid system that powers the world today. These energy innovations allowed humanity to gain access to natural resources that were not previously extractable.
Enter small modular reactors
Now, the resource exploration and extraction industries have entered a new era.
As rapid industrialisation occurred in some of the world’s most populous nations such as China, the total global consumption of materials has increased significantly. Existing high-grade deposits have begun to deplete fast, but new high-grade deposit discoveries in mining-friendly locations have slowed.
Geographical constraints, in conjunction with higher commodity prices, triggered mining companies to consider deposits in remote areas that were uneconomical before. Today, some of the new mining activities are occurring in extremely remote locations such as the Arctic, high mountains, islands and in the middle of the desert. Many of these remote locations lack access to reliable power sources, and need to rely on tens-of-millions-of-litres of shipped diesel for power generation, creating logistics and environmental challenges as well as capital constraints as tens-of-millions-of-dollars’ worth of fuel must be pre-purchased.
While these changes are happening in the mining industry, a nuclear power industry is going through its own changes as well. Since their introduction in the 1950s, nuclear power plants have been becoming larger with subsequent generations of designs to lower their power cost by realising economies of scale.
Some of the early nuclear power plants had generating capacities of only a few megawatts of electrical power (MWe), whereas modern reactors can generate as much as 1.7 gigawatts per unit. However, a new breed of technology developers emerged in recent years, and they are employing a different strategy to lower the power cost of nuclear reactors – that is, by creating smaller and standardised modular nuclear power plants that are easier and quicker to install and are orders-of-magnitude safer to operate than the conventional nuclear power plants. These new designs are called small modular reactors, or SMRs in short.
Today, there are more than a hundred SMR designs being developed by private companies and government institutes. There is a subgroup of these SMR technologies that are specifically being developed to supply power and heat to remote mine sites as diesel engine replacements. These ‘micro’ power nuclear power plants are often referred to as nuclear batteries, and they only generate between 3MWe and 10MWe per unit.
While these designs are in various stages of development, the leaders in the industry, such as Global First Power and USNC, are making rapid progress towards commercialisation by adding breakthrough safety and operational improvements to proven and existing nuclear reactor designs.
Why consider nuclear?
A nuclear power plant is a highly attractive option to supply power and heat to a remote mining operation.
First, it simplifies the fuel supply logistics. For a mining project that requires 50 million litres of diesel per year, a 20-year supply of energy can be secured by a micro nuclear power plant and 2.4 cubic metres of nuclear fuel. This simplification also comes with several environmental benefits, including elimination of spills and reduction in greenhouse gases that are associated with fuel deliveries.
Second, it provides a long-term energy price stability and predictability. Most nuclear-power-plant costs are fixed at the time of installation, and the power price will not be subject to volatile crude-oil price fluctuations.
Third, nuclear power is a fully dispatchable baseload generating asset that can also provide the heat necessary for mineral processing and warming staff complexes. These are perhaps the most significant differentiators for nuclear power technology from the renewable power that has a low penetration limit and cannot produce heat.
Fourth, since some SMR technology developers are planning to become independent power producers for remote mines, it allows miners to treat the energy cost as an operational expense rather than a capital expense. The CAPEX savings for avoiding a power plant construction and fuel pre-purchase and storage can be significant for a new project.
Last, the nuclear power cost is expected to be economically competitive against alternative energy sources. Several economic models produced by industry participants indicate that the nuclear power cost is much lower than diesel-based power costs.
From concept to reality
At the end of 2016, five technology developers were already in the vendor-design review process with the Canadian nuclear regulator, and another four to six developers plan to enter the process this year.
The survey conducted during the Hatch study on deployment feasibility of SMRs for the Ontario Ministry of Energy and Natural Resources Canada indicated that the industry leaders would be able to deploy their commercial units at remote mining sites in Canada within the next few years.
This technology is no longer a concept, but a certain reality.
Just like previous energy innovations changed the rules of resource extraction, small nuclear power technologies will be a game changer, and they will provide significant competitive advantages to those who embrace it early.
Any company that is involved in resource extraction and processing should keep a close eye on the development of the SMR industry, especially in the next couple of years.
Brian Gihm is a nuclear technology specialist at Hatch