Three major mining projects in South America are being advanced in parallel, Zijin Mining has invested 1.558 billion yuan, completely rewriting the old cost accounting logic of "purchasing oil for power generation" for its overseas mining areas.
Zijin Mining invests RMB 1.558 billion in solar-storage projects in South America to replace diesel power generation and recalculate the electricity cost of mining areas.
After market close on September 23, 2026, Zijin Mining released three overseas solar-storage investment announcements in a row.
The 170MWp photovoltaic system paired with 120MW/120MWh energy storage for Phase II of the Rosebel Gold Mine in Suriname, the 45MWp photovoltaic system paired with 50MW/100MWh energy storage for the underground mining plant of the Aurora Gold Mine in Guyana, and the 15MWp photovoltaic system paired with 20MW/80MWh energy storage for Phase III of the ore dressing plant, add up to 230MWp of total photovoltaic capacity and 300MWh of total energy storage capacity. The total investment is approximately USD 232 million, equivalent to RMB 1.558 billion, all of which is self-raised.
All three projects adopt the "self-generation for self-use" model, targeting the same goal: to dethrone the diesel generators that have served as the main power source for overseas mining areas for decades. This is no small expense, as it addresses a long-tolerated yet increasingly unbearable cost black hole in the global mining industry.
Diesel power generation is eating into mining profits
Power consumption in mining areas has long been treated as an "unavoidable hardship" by the industry. More than 80% of large mines worldwide are over 200 km away from the main power grid, and the cost of extending the grid reaches RMB 2 million per km. Most key ore belts have extremely low access rates to municipal power. Where the grid cannot reach, diesel generators have become the standard configuration.
But the cost of this standard configuration is so high that many mining company chief financial officers are reluctant to calculate it in detail. Institutional data shows that the domestic #0 diesel price in 2026 is about RMB 7450 per ton, and the factory arrival price in remote mining areas is even higher. The per-kWh cost of diesel power generation is generally between RMB 2.2 and RMB 2.8, and can reach USD 0.4 to 1.0 per kWh in remote overseas mining areas. In some mining areas, the diesel price has risen from about USD 1.8 per liter to USD 2.4 or even USD 3.5 per liter. Calculated based on about 3.5kWh of power generated per liter of diesel, the per-kWh cost is close to USD 1, equivalent to nearly RMB 7.
What is more troublesome is that most of the time, diesel generators operate in their most uneconomical working range. The load of mines fluctuates greatly day and night, and the load during night shifts and shift handover periods may only be half of the peak value, but the units cannot be shut down, as they also undertake the responsibilities of voltage support and responding to impact loads at any time. The startup of crushers and the start-stop of drilling rigs will generate spikes several times the average power in a few seconds. To meet these spikes, the units must be selected according to the peak power, resulting in the situation of "a large horse pulling a small cart" for most of the time. Fuel expenditure accounts for 30% to 45% of the total operating cost of mines, which is not a negligible figure.
The announcement states explicitly that the mine is located in a remote area, and its production power mainly relies on on-site diesel power generation, so the power cost is directly affected by fluctuations in international oil prices. This means every tension in the Middle East and every abnormal movement of oil prices will be reflected in the profit and loss statement of this gold mine in real money terms.
Zijin's plan is far more than saving electricity bills
If these three investments are only interpreted as a move to "save electricity bills", then the depth of Zijin Mining's layout is greatly underestimated.
The settlement pricing method for the two projects in Guyana is "50% × (average diesel power generation cost of the year + LCOE of solar-storage)", which directly links the electricity price to the diesel cost and only takes half of the average value of the two. The higher the diesel price, the higher the settlement electricity price of the solar-storage project. Zijin Mining has turned the uncertainty of oil price fluctuations, which plagues all mining enterprises, from a risk exposure into a source of revenue elasticity.
After the completion of the Phase II project in Suriname, it is planned to operate for 20 years, with an estimated settlement electricity price of about USD 0.12 per kWh and an average annual power generation of about 244 million kWh, which can replace about 38.8% of diesel consumption in the Rosebel and Saramacca mining areas. The Rosebel Gold Mine produced about 3.8 tons of gold in the first half of 2026, a year-on-year increase of about 15%, with AISC dropping to about USD 1701 per ounce. The two lines of gold production increase and power cost reduction advance simultaneously, and the release direction of profit elasticity is consistent.
The scale effect is also beginning to appear. The key overseas projects promoted by Zijin Mining have covered multiple mining areas in Serbia, Guyana, the DRC, Suriname and other regions, with more than 3GW of green power resources in hand, and the total value of the power stations is about RMB 9.3 billion. When the procurement volume of solar-storage equipment crosses a certain threshold, the marginal cost continues to decline, and the investment payback period is shortened accordingly.
The estimation of the global mining solar-storage market space provides a more macroscopic reference. The global annual fuel consumption of mining diesel power generation systems is about 40 million tons. Within the range of diesel power generation cost of USD 0.5 to 1 per kWh, based on the assumption that mining solar-storage can save 70% of power costs, the corresponding annual global mining solar-storage market space is USD 25 billion to USD 49.4 billion. RMB 1.558 billion is not a large amount in this market, but it verifies a replicable path: Mining enterprises invest in solar-storage on their own, turning power from an outsourced cost item into an endogenous profit item.
Mining microgrids are rewriting energy rules
As of May 2026, the per-kWh cost of solar-storage microgrids for mines has dropped to RMB 0.6 to RMB 0.7, gradually approaching the electricity price level of traditional power grids. A few years ago, the per-kWh cost of solar-storage microgrids was far higher than that of diesel power generation. The turning point comes from the price decline on the equipment side: the price of photovoltaic modules has dropped from USD 0.6 per Wp to USD 0.11 per Wp, and the cost of lithium-ion batteries has also fallen significantly at the same time. The cost of photovoltaic and energy storage, the two major cost components, have both been cut by half. The economy of microgrids has shifted from "unaffordable even in calculation" to "obviously cost-effective without even calculation".
Overseas cases are continuously verifying this path. For a gold mine in Mato Grosso, Brazil, GreenYellow deployed a 3MW photovoltaic plus 5MWh energy storage hybrid microgrid system for it, with an investment of about 18 million reais. It is expected to generate 4.74GWh of electricity annually, saving the mining enterprise about 165,000 reais in operating costs every month. The system adopts the "Energy as a Service" model, with GreenYellow responsible for investment and operation, and the mining enterprise pays according to the amount of power supplied. After completion, the project will operate in coordination with the existing diesel generators in the mining area, and its core logic is completely consistent with Zijin Mining's South America layout.
The data of Huawei's smart microgrid solution at the Manono Lithium Mine in the DRC is equally convincing: the system has a solar-storage penetration rate of 75%, providing more than 6.18 million kWh of green power annually and saving about USD 3.71 million in electricity bills per year. The solar-storage-diesel microgrid project of Sany Silicon Energy at the Rada Mine in Zambia has a green power proportion of over 95%, saving customers about RMB 40 million in power costs every year. The common feature of these projects is: Diesel generators are still retained, but their role has degraded from the main power source to backup emergency power, and fuel consumption has plummeted.
The technical path proposed by Huawei in its mining microgrid white paper also points to the same direction. The grid-forming energy storage technology enables the power ratio of photovoltaic to energy storage to reach 2:1 in off-grid mode, reducing the system LCOE by 30%. Technical verification has been completed, and what remains is only the large-scale replication of business models.
At present, four major business models have taken shape in the industry: EPC+O&M, IPP/PPA power sales, overseas mixed capital investment and financing, and ESG green premium. Microgrids have evolved from the early simple backup power supply system to a new type of power infrastructure integrating power supply, energy efficiency management and carbon emission governance.
The underlying logic of this recalculation of the mining power account is not complicated. The price of solar-storage equipment continues to decline, and the diesel price is bullish in the long run, so the cost scissors gap between the two will only widen further.
For mines located in remote areas not covered by the power grid, continuing to rely on diesel power generation means handing over the lifeline of profits to international oil prices. Zijin Mining's RMB 1.558 billion bet in South American mining areas is not betting on policy subsidies or carbon trading revenue, but on the most simple business common sense: self-generated power is cheaper, and much cheaper, than power generated by buying oil.