Australia: Marching Towards A Lower Carbon Future

Philippe Baudry, RPMGlobal, shines a light on the Australian mining industry’s carbon reduction push.

With sustainability now viewed as an ethical norm and an important part of businesses’ social licence to operate, the challenge for the mining industry to move to a greener future is an opportunity to reset the industry’s reputation within the broader public. Like its global peers, Australia’s mining industry is welcoming this challenge, with many companies making a firm commitment to reduce carbon emissions as part of the 2015 Paris Agreement, which came into place in 2020.

Australia, which is home to four of the world’s 10 biggest coal mines and is the biggest coal exporter in the world, certainly has a lot of work to do to push into clean energy and emissions abatement. But, with the abundant economic opportunities of decarbonisation, Australia, and its world-class resources sector, has strong imperative to emerge as a zero-carbon energy powerhouse. In addition, underground coal mines are proving to be the most electrified mines today. The Australian mining sector is already developing advanced

technologies that will help cut emissions. Technological improvements such as increasing automation and electrification of mining equipment creates opportunities for the mining sector to turn the goal of net zero emissions by 2050 into reality, while simultaneously creating a range of productivity and eff iciency benefits, including fuel consumption savings.

According to a recent study by investor coalition, The Climate Action 100 initiative, Australian companies are second only to Europe with regards to setting net-zero targets.1 Furthermore, the Australian governments’ new Energy Technology Roadmap off ers a feasible way forward for activating an array of technologies that can sustainably support a net-zero emissions future.

Australia’s mining sector is itself taking the right steps to not only innovate so that it can produce metals in an energy eff icient and socially responsible way, but is doing so to support the rest of the world’s goal of a greener future through supplying the key metals necessary to do this. Analysis by consultancy firm, Wood Mackenzie, states mining companies will need to invest US$1.7 trillion in the next 15 years to help supply enough copper, cobalt, nickel, and other metals needed for the shift to a low carbon world. Whichever metric one looks at it, this will require a significant uplift in activity and investment across the entire mining value chain.2 The following are the key trends taking place in the Australian mining industry, all of which aim to lay the groundwork for a lower carbon future and the transition to greener energy.

Sourcing clean energy

With climate change concerns accelerating the mining industry’s shift away from fossil fuels, there is likely to be a significant uplift in demand for green power. In an eff ort to reduce the use of diesel generators and minimise Scope 2 carbon footprints, mining companies are increasingly looking for off -grid power solutions. According to the Australian Renewable Energy Agency (ARENA), the Australian mining sector consumes roughly 500 PJ/y, equating to 10% of Australia’s total energy use.3 The mining sector derives most of its energy from diesel (41%), followed by natural gas (33%), and grid electricity (22%).

With Australia’s industry broadly welcoming a decarbonisation agenda, reflected in the strong commitments to transition to alternative means of energy for transportation, there is likely to be a significant uplift in demand for electricity at mine sites. As part of the collective push under the reduction of Scope 2 greenhouse gas (GHG) emissions (indirect emissions) to source electricity through renewable sources or more carbon eff icient means, the mining sector’s investment in alternative power options will continue to grow. Solar power, particularly in remote locations, is proving to be an attractive energy alternative for Australian mines, albeit with some challenges around land use in heritage sensitive areas. Figures from ARENA show that approximately 35% of Australia’s 400 mining operations are not connected to the primary energy markets, with operating off -grid historically meaning that diesel or – for the few within reach of existing gas pipelines,

such as the goldfields of Western Australia – gas turbines have been the mainstay of mine power generation.

In recent years, a spate of Australian mining companies have implemented green energy initiatives, including Sandfire Resources, which installed a mega-sized solar, battery, and diesel hybrid system at the Degrussa mine in Western Australia. Other renewable developments across the industry include a 3 – 4 MW solar system at Image Resources’ Boonanarring mineral sands project and the installation of a 6.7 MW solar system at Rio Tinto’s Weipa bauxite mine. Recent projects and studies have now started to consider adding into the mix solar and wind, with large, long life, energy intensive projects looking into hydrogen. Some overseas projects have even gone as far as considering portable nuclear reactors, which can provide 70 MW of electricity or 300 MW of heat, or co-generation of electricity and heat for projects in colder climates.

With the cost of both solar and wind coming down, as well as the opportunity to store energy through batteries (or in the case of district scale project, possibly pumped hydro schemes as is currently being developed by Genex Power at its Kidston Stage 2 Pumped Storage Hydro Project), the possibility of off grid assets to move to fully renewable energy sources is closer than ever.

Figure 1. Miners are increasingly turning to solar energy in a bid to decarbonise operations.

Figure 2. The Pilbara region is the heart of Australia's world-leading iron ore industry, and is the epicentre of the industry's push to develop sustainable steel.

Electrifi cation of mines

Electrification is seen as the biggest enabler of achieving net zero by the mining industry. A recent report commissioned by the Weir Group plc identified that in a typical opencast copper mine producing a concentrate, 60% of energy consumed was through mining equipment, 36% comminution (crushing and grinding), and 4% for other processing.4 While the figure will vary depending on mining and processing methods, it provides valuable insight into the decision by miners to initially focus their clean energy eff orts on the electrification of fleets as a way to decarbonise mining operations. Mining electrification discussions are dominated by a move to electrical (trolley assist or battery) or hydrogen fuel cell vehicles, with a majority of Tier 1 producers already taking a position as to which technology will form part of their electrified mine of the future.

While these are no doubt the technologies which will provide a similar flexibility to that which miners currently enjoy, there is also an opportunity for larger longer life project alternative means of moving both ore and waste from the mine. RPMGlobal has previously been involved with material mass movement studies for some of the world’s biggest mines where consideration was given to using in-pit crushing and conveying (IPCC), or taking this even further and developing ore passes to a point below the lowest levels of the projected opencast, with crushing stations and conveyors taking the ore and waste out through tunnels back to the process plant and waste dump. While the capital requirement is significant, the savings over the life of mine in terms of fleet replacement and reduction in congestion as the mine gets deeper made this an interesting project. At the time, the impact of the alternative option on GHG emissions was never considered as part of the decision-making process.

Was this study to be redone today, there is no doubt that on top of safety, practicality and net present value, the long-term GHG emission footprint of such a decision would also now be considered. This move to considering options, not simply on technical and financial merits, but also the impact on GHG emissions, is a trend that is starting to take place and that has driven an evolution in both the project study process and scoping, as well as technology development.

Clean hydrogen

The other big trend sweeping the industry is the march towards hydrogen and ‘green’ steel. Hydrogen (blue and green) is created through the electrolysis of water, with blue hydrogen relying on natural gas to generate the electricity for electrolysis with gas sequestration. Green, however, is truly renewable, only using solar, wind, etc., to drive the electrolysis, thus creating the opportunity for a shift to sustainable renewable energy for both fixed and mobile plants. Currently, metallurgical coal is the only known alternative to hydrogen which is used as a flux in steel manufacturing. If hydrogen could be generated and safely transported and stored in suff icient quantities from renewable sources (solar, wind, natural gas with sequestration) then it is technically feasible to generate steel with almost no

GHG emissions. So far, green hydrogen is only available in homeopathic doses at high prices. However, APAC countries have already made positive steps, with China already operating entire bus and urban truck fleets on hydrogen, while Japan secured a first-mover advantage by pivoting some of its car manufacturers towards hydrogen and rolling out refuelling stations across the country a decade ago.

For the Australian mining industry, Fortescue Metals Group (FMG) is leading the charge when it comes to aspiring for green steel production, powered by zero-emissions energy. The Pilbara iron ore miner, founded by Andrew Forrest, has set an ambitious goal of being able to supply at least 15 million t of green hydrogen in 2030. The company has not wasted any time investing in green hydrogen production and technologies to make its goal a reality, including securing a partnership with the CSIRO to develop new hydrogen technologies, as well as committing AUS$32 million to a hydrogen mobility project at its Christmas Creek operation in the Pilbara. Hydrogen as a fuel source is also generating a lot of attention from a transportation standpoint. Significant investment is already being made in hydrogen-powered mining vehicles, most notably seen with a commitment from Anglo American for the build of a 290 t hydrogen-powered mining truck. Harnessing hydrogen as a fuel source goes well beyond the mine gate, with trains already running on hydrogen in Europe, and, over the next decade, likely to appear in the Pilbara, with the conversion of bulk carriers to ammonia being tested by FMG. While the appetite for hydrogen in the Australian mining sector is growing, challenges remain for the uptake of hydrogen technologies in the industry globally, given that hydrogen solutions have not reached commercial scale.

Figure 3. Australia’s mining industry continues to source most of its energy from diesel. However, with a broad commitment to a lower carbon future, the uptake of greener energy sources is emerging.

Figure 4. Swedish mining company, Boliden, is expanding the electrified trolley system. Electrification of mine sites is a key enabler for the industry’s shift to decarbonisation.

Fugitive emissions and reduction of energy processing intensity

Other areas that the Australian mining industry is focusing on in a bid to decarbonise include: increased capture and use of fugitive emissions, and the optimisation of processing to reduce the energy intensity of a mine. Fugitive emissions are released during the extraction, processing and transport of fossil fuels, and account for approximately 10% of Australia’s GHG emissions being generated. The primary drivers of emissions are the amount of coal produced, the emissions intensity of the mine, and the amount of methane captured. The industry is placing a concerted eff ort on managing and reducing its fugitive emissions, given they make up a significant component of GHG emissions, with work taking place in methane capture technologies amongst other initiatives.

With the report from Weir Group identifying that the crushing and grinding process is the single biggest consumers of energy at mine sites – accounting for at least 25% of the overall energy consumption – opportunities to reduce the energy intensity of a mines’ materials through processing plants will be the next big focus for the sector. This represents a huge opportunity for Australia’s miners to limit emissions through the adoption of diff erent methodologies and emerging technologies, and is therefore an area to watch. This will require an increased understanding of geometallurgical characteristics of ore types and how they impact blasting and crushing characteristics.

Momentum for clean energy tipped to continue across industry

With environmental, social, and governance (ESG) issues taking a front seat on the shareholder agenda, the business case for renewable energy adoption in the mining industry is stronger than ever. The mining sector will continue to evolve and develop new innovative initiatives, technology, and partnerships to collectively meet decarbonisation targets. The next decade, in particular, is likely to see some of the biggest and fastest shift s in mining technology adoption, all driven by a singular goal to decarbonise. Australia’s mining sector already has a strong track record as a leader in sustainability performance, and with a strong commitment from key players in the industry to reduce carbon emissions, it is clear Australia’s miners are proving steadfast in their ability to apply green thinking into action.

References

1. ‘Climate Action 100+ issues first-ever net zero company benchmark of the world’s largest corporate emitters’, Climate Action 100+, https://www. climateaction100.org/news/climate-action-100-issues-its-first-ever-netzero-company-benchmark-of-the-worlds-largest-corporate-emitters/ 2. ‘Faster decarbonisation and mining: A crisis of confidence or capital?’,

Wood Mackenzie, (2020), https://www.woodmac.com/news/opinion/ faster-decarbonisation-and-mining-a-crisis-of-confidence-or-capital/ 3. ‘Renewable Energy in the Australian Mining Sector’,

Australian Renewable Energy Agency, https://arena.gov.au/knowledgebank/renewable-energy-australian-mining-sector/ 4. 'New report identifies major carbon reduction opportunities in global mining’, The Weir Group, https://www.global.weir/newsroom/newsarticles/new-report-identifies-major-carbon-reduction-opportunities-inglobal-mining/