Three South American mining projects launched simultaneously: Zijin Mining invests RMB 1.558 billion, overhauling the old financial model of "diesel power generation at mining sites"

Zijin Mining invests RMB 1.558 billion in South American solar-plus-storage assets to substitute diesel power, recalculating the power economics for mines

After market close on September 23, 2026, Zijin Longjing released three investment announcements for overseas solar-plus-storage projects in one go. The Rosebel Gold Mine Phase II in Suriname features a 170 MWp photovoltaic system paired with 120 MW / 120 MWh energy storage. For the Aurora Gold Mine in Guyana, the underground mining plant will install a 45 MWp PV array with 50 MW / 100 MWh storage, while Phase III of the concentrator plant will add 15 MWp PV and 20 MW / 80 MWh storage. Collectively, the portfolio comprises 230 MWp of photovoltaic capacity and 300 MWh of energy storage, with a total investment of approximately USD 232 million (equivalent to RMB 1.558 billion), fully funded by internal capital.

All three projects adopt the self-consumption model, targeting the same objective: displacing diesel generators, which have long served as the primary power source at remote overseas mines. This is no trivial accounting exercise; it addresses a persistent yet increasingly unaffordable cost drain across the global mining sector.

Diesel Power Generation Is Eating Into Mining Profit Margins

Power supply for mining operations has long been treated as an unavoidable constraint in the industry. More than 80% of large global mines lie over 200 km away from main power grids, and grid extension costs can reach RMB 2 million per kilometer. As a result, most key mining belts have very limited access to utility power, leaving diesel generators as the default power solution.

However, this default solution carries staggering costs that many mining CFOs are reluctant to examine in detail. Industry data shows that the delivered price of diesel at remote sites is far higher, with the levelized cost of electricity (LCOE) for diesel generation ranging from RMB 2.2 to 2.8 per kWh, and hitting USD 0.4–1.0 per kWh at remote overseas mines. At some sites, diesel prices have climbed from roughly USD 1.8 per liter to USD 2.4 or even USD 3.5 per liter. Given that one liter of diesel generates around 3.5 kWh of electricity, the corresponding power cost approaches USD 1 per kWh, equivalent to nearly RMB 7 per kWh.

Compounding the issue, diesel generators mostly operate at their least efficient load range. Mine power demand fluctuates sharply day and night; load during night shifts and changeovers may drop to half the peak value, yet generators cannot shut down. They must maintain voltage support and respond instantly to sudden load surges. Equipment such as crushers and drill rigs can draw power spikes several times the average load within seconds. Generators are therefore sized for peak demand, meaning they run underutilized ("oversized plant for light load") most of the time. Fuel expenses account for 30% to 45% of total mine operating costs — a figure that cannot be dismissed.

The official announcement explicitly states that the mine is located in a remote area, with production power mainly supplied by on-site diesel generators. Power costs are directly exposed to swings in international oil prices. This means every flare-up in the Middle East and every oil price shift hits the gold mine’s profit-and-loss statement in hard cash.

Zijin’s Strategy Is About More Than Just Cutting Power Bills

Viewing these three investments merely as electricity cost savings underestimates the depth of Zijin Longjing’s strategic layout.

Pricing for the two Guyana projects follows a formula: 50% × (annual average diesel generation cost + solar-storage LCOE), directly linking power tariffs to diesel costs and taking only half of the average of the two values. The higher diesel prices rise, the higher the settlement tariff for the solar-plus-storage project. Zijin Longjing converts oil price volatility — a headache for all mining operators — from a risk exposure into profit upside.

Upon completion, the Suriname Rosebel Phase II project will operate for a planned service life of 20 years, with an estimated settlement tariff of USD 0.12 per kWh and annual power generation of roughly 244 GWh. It will replace about 38.8% of diesel consumption at the Rosebel and Saramacca mining areas. In H1 2026, Rosebel Gold Mine produced approximately 3.8 tonnes of gold, a year-on-year increase of roughly 15%, with all-in sustaining cost (AISC) falling to around USD 1,701 per ounce. Gold production growth and power cost reduction advance in tandem, unlocking profit leverage in the same direction.

Economies of scale are also taking shape. Zijin Longjing’s priority overseas pipeline covers mines in Serbia, Guyana, the Democratic Republic of the Congo and Suriname, with over 3 GW of green power assets under development valued at about RMB 9.3 billion. Once procurement volumes for solar and storage hardware cross critical thresholds, marginal costs keep falling and payback periods shorten.

Global market sizing for mine solar-plus-storage provides a broader macro perspective. Global mining diesel systems consume around 40 million tonnes of diesel annually. Assuming solar-storage solutions cut power costs by 70% within the diesel LCOE range of USD 0.5–1.0 per kWh, the corresponding annual global market potential for mine solar-plus-storage stands at USD 25–49.4 billion. At RMB 1.558 billion, this investment is modest against the total market, yet it validates a replicable model: mining operators investing in their own solar and storage assets, turning power from an external expense item into an internal profit driver.

Mining Microgrids Are Rewriting Energy Rules

As of May 2026, the LCOE for solar-plus-storage microgrids at mines has dropped to RMB 0.6–0.7 per kWh, gradually approaching grid power tariffs. Only a few years ago, solar-storage microgrids were far more expensive than diesel generation. The turning point came from hardware price declines: photovoltaic module prices fell from USD 0.6/Wp to USD 0.11/Wp, while lithium-ion battery costs also declined substantially. With the two largest cost components of solar and storage both slashing costs, microgrids have become economically viable, no longer a marginal calculation exercise.

Overseas cases are continuously validating this model. A gold mine in Mato Grosso, Brazil, deployed a 3 MW PV + 5 MWh hybrid microgrid built by GreenYellow. The project required roughly 18 million Brazilian reals in capital outlay, generates an estimated 4.74 GWh per year, and cuts the mine’s operating expenses by approximately 165,000 reals each month. Adopting an Energy-as-a-Service (EaaS) model, GreenYellow funds and operates the system while the mine pays for electricity consumed. The completed facility works in tandem with the mine’s existing diesel generators within a microgrid framework, following the same core logic as Zijin Longjing’s South American rollout.

Data from Huawei’s intelligent microgrid solution deployed at the Manono Lithium Mine in the DRC is equally compelling: the system achieves a solar-storage penetration rate of 75%, delivering over 6.18 GWh of green power annually and cutting power spending by around USD 3.71 million per year. Sany Silicon Energy’s solar-diesel-storage microgrid project at the Rida Mine in Zambia attains a green power share exceeding 95%, saving the client about RMB 40 million in electricity costs every year. These projects share a common trait: diesel generators remain on-site but are demoted from primary power sources to emergency backup units, resulting in a dramatic drop in fuel burn.

Huawei’s whitepaper on mining microgrids outlines a technical roadmap pointing to the same outcome. Grid-forming energy storage enables a 2:1 power ratio between PV and storage in off-grid mode, lowering system LCOE by 30%. Technical validation is complete; what remains is large-scale replication of the business model.

Four major business models have matured in the sector: EPC+O&M, IPP/PPA power sales, hybrid overseas capital financing, and ESG green premium monetization. Microgrids have evolved from simple early backup power systems into modern power infrastructure integrating power supply, energy efficiency management and carbon emission control.

The underlying logic behind this recalculation of mine power economics is straightforward. Solar and storage hardware prices keep falling while diesel prices maintain an upward long-term trend, widening this cost gap over time.

For remote mines unreachable by utility grids, continued reliance on diesel generation means surrendering profit margins to international oil prices. With its RMB 1.558 billion bet in South American mining districts, Zijin Longjing is not wagering on policy subsidies or carbon trading revenues. It rests on plain commercial reality: self-generated power is far cheaper than buying diesel for on-site power generation.