Pod 5: The roadmap to net-zero for Chilean mines

Because of Chile’s exceptional renewable energy sources and government commitment to hydrogen technology, the roadmap to net-zero for Chilean mines may be clearer than in other countries. In a country-specific session sponsored by the Canadian Trade Commissioner Service, Chilean mining leaders shared their experiences around energy and fleet decarbonisation.

On the electricity supply side, Chile is blessed with a competitive renewable energy market. Already, 70% of Teck Resources energy contracts in the country are based on renewable energy, and Marcos Cid, Energy Manager at Teck Chile, estimates that this is the norm across the industry. “I believe 100% renewable energy is going to happen sooner than we think,” he said.

BHP is also in the process of converting its electricity supply in the country, having already awarded 6 TWh of renewable energy PPAs in recent years. “We have an exceptional opportunity to have greener sources of supply: Chile has the highest radiation desert in the world, enormous wind resources and hydropower in the South. And renewable energy is already competitive: we’ve reduced our costs by 20% compared to previous fossil fuel contracts,” noted Sebastian Rivas, Lead Energy & Water Management, Strategic Services, Minerals Americas at BHP.

He added that energy storage will be key to reaching 100% renewables, and that BHP already has a tender process in place for behind-the-meter solutions, with the goal to reach netzero electricity in Chile around 2025. This focus on greening the electricity supply is deeply connected with the scope 1 decarbonisation that is also happening in the country, both through hydrogen development and battery electrification. “All initiatives to displace scope 1 emissions rely on electricity, so displacing scope 2 emissions is a key enabler, and energy storage is an essential solution we need for that,” said Rivas.

Chile is betting heavily on green hydrogen, expecting to have one of the lowest costs of production in the world, but there remain challenges around distribution, storage and logistics. This is where miners are taking matters into their own hands: Anglo American is testing its own hydrogen production and refuelling facility in South Africa, with the objective of converting whole fleets to hydrogen haul trucks. “Under our analysis, the use of green hydrogen to replace diesel on mining trucks is the most attractive alternative, due to the dynamic energy profiles and flexibility needed in mine haulage”, said Ignacio Pérez, H2 Technology and Energy Manager at Anglo American Chile. And of course, time is of the essence. “To achieve 2040 carbon neutrality we will need to have close to eight carbon-neutral mines by 2030: that’s a major challenge for technological development. OEMs don’t expect to develop these trucks in the coming years, which is why we developed our own solution,” he added.

Unlike Anglo American, which aims to produce hydrogen on site, Antofagasta Minerals sees itself as an offtaker of green hydrogen. But the company is still taking an active role in developing this technology. “There is no time to wait for others to develop the technology, that’s why we are working with OEMs and others to meet our hydrogen needs,” said Andrés Alonso, Manager, Energy & Water Resources, Antofagasta Minerals.

Codelco is taking a technology-agnostic approach to fleet decarbonisation, but the company does have a target of switching to 100% renewable energy and 100% electric equipment in underground operations by 2030. “We need to develop our internal capabilities and prepare our mines to be electric, which is not necessarily straightforward. It is not only about the technology but also the right people,” explained Gonzalo Ramirez, Project Manager – Electromobility and Energy Transition at Codelco.

In the race to decarbonise operations, panellists reminded the audience that collaboration is crucial. “The race is not between each other, it’s a race with the world, and that creates space for collaborative innovation,” added Ramirez.

They also urged each other to cooperate more on a national level, pointing out that most of the miners present were part of industry initiatives in other countries, but not in Chile. “We have the size and the capability for doing something here in Chile. Based on our commitments as a country and as an industry, we have to push for all solutions and be early adopters.” Alonso said.

Many aspects of the decarbonisation of Chilean mines may still be in the balance, but the abundance of renewable resources, as well as the pace of innovation and new technology adoption, are placing the country firmly in the lead in the race to net-zero mining.