PATHWAYS TO NET ZERO MINING: NOT EXACTLY A CLEAR WAY AHEAD

By now, most mining companies, and certainly all of the majors, have announced targets to achieve net zero emissions. The majority plan to meet this objective by 2050, with some exceptions (Australia’s Fortescue is aiming for 2040, while China Shenhua Energy has a 2060 deadline).

These targets come with detailed plans to reduce emissions from mines’ own operations (Scope 1), as well as energy use (Scope 2) and parts of supply chains (Scope 3), and the roadmap generally features interim objectives set for 2030 or even 2025. This means the sector is getting closer to having to show actual results in its pursuit of decarbonization – yet obstacles remain that could jeopardize the achievement of short and long-term targets.

Renewable Energy Capacity

Almost all [off-grid] miners plan to switch from fossil fuels to renewables-based energy to power their operations. Along with improving energy efficiency, this is the best way to tackle Scope 2 emissions, which can represent anywhere from 5% of emissions for coal miners to almost half for gold miners

With six years to go before interim climate deadlines, the path to net zero mining is not as clear as it should be.

But to this day, there simply isn’t enough renewable energy being generated in the world to supply the entire sector, let alone other sectors making the same transition. “The biggest challenge is going to be the absolute scale that’s required. And with that scale, the power supply is going to be a real challenge. The mining industry, when it’s not self-supplying, will have to compete with every other renewable power user that’s trying to move towards net zero,” Anthony Knutson, Metals and Mining Emissions Research Lead at Wood MacKenzie, tells Energy and Mines.

Miners may take comfort in the International Energy Agency’s (IEA) latest Net Zero Roadmap published in late September 2023, which states that “limiting global warming to 1.5 °C remains possible due to the record growth of key clean energy technologies”. However, according to the IEA, global renewable power capacity still needs to triple by 2030 to meet the demands of a 1.5ºC scenario.

Some in the sector believe that achieving zero-carbon energy supply within targets will require exploring options besides solar and wind generation. “This is not going to be a popular statement, but if we are going to be talking about fossil fuelfree energy, we have to be talking about nuclear,” says Tom Juric, Divisional Director at Liebherr Canada, pointing out that this is a personal opinion, not his company’s.

‘WAIT AND SEE’ NO LONGER AN OPTION

While energy capacity and technological challenges will take time to be overcome, industry experts warn that miners cannot simply sit and wait, and worry about a perceived lack of action, even from miners that have announced ambitious targets.

Maarten Van Koppen, Vice President of Product Management at MacLean Engineering, says he has observed contradictory behavior from clients: “We’ve seen some mining companies that have set really aggressive targets for 2030 move ahead with [conventional] equipment, even though that equipment might last them 20 years. You’re either not going to meet your targets or you’re going to accept the fact that you’re going to have to replace it halfway through its life. I think there still is often a bit of a disconnect between corporate targets and local decisions.”

This is partly due to the fact that some of the technology needed to decarbonize – particularly around mobility – is still in its infancy. For instance, the debate between hydrogen and batteries is ongoing, though the recent decision made by Australia’s three largest miners (BHP, Rio Tinto and

Fortescue) to focus exclusively on battery-electric vehicles certainly sent a clear demand signal to OEMs.

For Juric at Liebherr, there is no single silver bullet, and that makes it difficult for miners to commit to one technology. “Diesel was easy to produce, easy to manufacture, easy to transport, easy to store, and so on. The current technologies that we are seeking to displace it with, things like hydrogen, ammonia, and electricity, have their advantages, but there are also some considerations and perhaps disadvantages. So I think the biggest challenge there is for mining houses to converge on one or a couple of technologies. Nobody has a definitive, ‘this is the way we’re going to go’. I believe people are waiting for the technology to catch up, and my caution to the industry is: don’t wait too long.” He recommends making a decision and sticking to it while maintaining some flexibility “should something better come along”.

Carbon pricing regulations – particularly the EU’s Carbon Border Adjustment Mechanism (CBAM), which will effectively impose the EU’s carbon tax on many non-EU mining products – are widely seen as the catalyst needed to prompt action, even from those reluctant to it.

Solving The Infrastructure Equation

Even in areas where the path to net zero is seemingly straightforward, implementation remains challenging. For instance, electric vehicles for underground mines are becoming broadly available, but companies have yet to figure out how to charge them with 100% renewable energy.

“That link has not been made very often just yet,” notes Van Koppen. “For starters, you need to really understand how much power you’re going to need, especially if you’re going to be self-generating, and the reduction in ventilation that you can realize. And then, make sure that the power is of sufficient quality to ensure that the power electronics don’t have a hard time with it. There are not a tonne of case studies out there just yet to my knowledge,” he adds.

Projects like Torex Gold’s Media Luna in Mexico, which involves the construction of a solar plant as well as the implementation of battery-electric equipment, could inform the next steps in the transition – as long as learnings are shared with the wider industry.

“I think there’s a lot more that could be done in terms of collaboration if we could just come to terms with this competitive advantage being eroded by sharing information and results. Perhaps together we could somehow crack that magic code that would be akin to us creating some renewable diesel that was net zero and easy to generate, using waste products and all that sort of stuff: that would be a watershed moment. Information and data sharing could accelerate us by decades,” says Juric.

Sustainability Targets Are Key To The Future Of The Industry

As things stand, the risk that miners could miss their net zero targets, especially the interim goals set for 2030, does exist – but pressure from investors, governments and society should keep the sector in line. According to Knutson at Wood MacKenzie, the likelihood of meeting targets depends on locations and commodities mined. He explains: “In terms of meeting their goals and the wider 2050 targets, I think these are achievable. They’re definitely striving for that, and it’s not all lip service: a lot of money has been invested. But there’s a lot of moving parts, a lot of balls in the air that need to connect, as well.”

One thing is for sure: meeting climate targets will be key in attracting the right talent to guide the industry through the transition to a sustainable economy. Already, companies are facing challenges in hiring the next generation of engineers and operators, as the industry’s reputation as environmentally and socially disruptive is deterring graduates from pursuing a career in mining. MacLean is working with colleges to develop the right curriculum to meet the sector’s talent demand for technicians who have to maintain the new battery electric equipment, but Van Koppen notes that it hasn’t “seen a lot of uptake”.

For Knutson, the mining industry has been “demonized”, and sustainability is a crucial element in cleaning up its reputation. “We haven’t done a good job promoting it, but we need that human capital in there to support sustainability efforts going forward.”