Tag Archives: decarbonisation

MCA spells out Australia mineral industry’s decarbonisation plan

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The Minerals Council of Australia (MCA) has released a Climate Action Plan that, it says, demonstrates the ongoing commitment of the Australia minerals industry to decarbonise the economy and address climate change.

The plan outlines how the MCA and its members are taking action on climate change as part of the minerals sector’s collective commitment to the Paris Agreement and its goal of net zero emissions globally and in Australia, the MCA said.

It outlines a series of actions focused on three key themes:

  • Support developing technology pathways to achieve significant reductions in Australia’s greenhouse emissions;
  • Increased transparency on climate change related reporting and informed advocacy; and
  • Knowledge sharing of the sector’s responses to addressing climate change.

The MCA said: “Sustained climate action across all nations is required to reduce the risks of human-induced climate change and to support worldwide decarbonisation as we transform to a lower emissions future.”

Among a number of technologies being supported in the plan are low carbon opportunities such as renewable energy and the use of electric vehicles at mine sites.

“With this plan, the sector acknowledges the critical importance of technology in reducing emissions,” the MCA said. “The minerals industry works with manufacturing and innovation partners to invent, develop and deploy new techniques and technologies.”

It added: “It is clear that the scale of the technology-led transformation required will not occur without the minerals and raw materials provided by the Australian mining sector. The industry sees great opportunities for minerals such as lithium, cobalt and copper in all forms of transport infrastructure, communications and energy systems.”

The MCA’s Climate Action Plan is made up of two components: an enduring 10-point framework to support three core objectives and a comprehensive three-year rolling work plan with 30 activities.

The Climate Action Plan will be reviewed annually and publicly reported on to ensure it remains consistent with Australia’s climate policy ambitions in support of the Paris Agreement.

The MCA concluded: “The plan demonstrates that the minerals sector not only has the ambition to decarbonise the sector – it also has an action plan to get there.”

To read more about the plan, click here.

Anglo, BHP, FMG and Hatch back green hydrogen developments

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Anglo American, BHP, Fortescue Metals and Hatch say they have formed a Green Hydrogen Consortium to look at ways of using green sources of hydrogen to accelerate decarbonisation within their operations globally.

Primarily, the consortium aims to collectively help to eliminate the obstacles to the adoption of green hydrogen technologies and encourage innovative application, they said.

“The goal is to identify opportunities to develop green hydrogen technologies for the resources sector and other heavy industries, and provide a mechanism for suppliers and operators to contribute to and engage with these development activities,” the four firms said.

The member companies of the Green Hydrogen Consortium stated that they are technology agnostic and are considering a range of options to progress decarbonisation of their operational greenhouse gas emissions, according to a fact sheet issued by the consortium.

“Given the range of applications for green hydrogen and the cost challenges associated with it, the consortium was formed to work together to seek to de-risk its application and enable acceleration of cost reductions,” the partners said. The consortium is expected to be in place for three years.

While Anglo American is currently developing the world’s largest hydrogen-powered mine haul truck for testing at the Mogalakwena platinum group metals site, in South Africa, Fortescue already has a partnership in place with CSIRO, Australia’s national science agency, on the development of hydrogen technologies.

Some of the proposed activities of the consortium include undertaking research, technology and supply chain development, and piloting green hydrogen technologies to seek to de-risk and accelerate the technologies, the partners said.

“The companies involved in the consortium are committed to reducing their respective operational greenhouse gas emissions and to working collaboratively with others – including customers and suppliers – to find technological or other innovative solutions for the emissions associated with the use of their products and in their supply chains,” they said.

Hatch, the lone engineering company in the consortium, has been appointed as the Project Management and Governance Facilitator of the consortium.

Miners need to do more in climate change, decarbonisation battle, McKinsey says

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A report from consultancy McKinsey has raised concerns about the mining industry’s climate change and decarbonisation strategy, arguing it may not go far enough in reducing emissions in the face of pressure from governments, investors, and activists.

The report, Climate risk and decarbonization: What every mining CEO needs to know, from Lindsay Delevingne, Will Glazener, Liesbet Grégoir, and Kimberly Henderson, explains that extreme weather – tied to the potential effects of climate change – is already disrupting mining operations globally.

“Under the 2015 Paris Agreement, 195 countries pledged to limit global warming to well below 2.0°C, and ideally not more than 1.5°C above preindustrial levels,” the authors said. “That target, if pursued, would manifest in decarbonisation across industries, creating major shifts in commodity demand for the mining industry and likely resulting in declining global mining revenue pools.”

They added: “Mining-portfolio evaluation must now account for potential decarbonisation of other sectors.”

The sector will also face pressure from governments, investors, and society to reduce emissions, according to the authors.

“Mining is currently responsible for 4-7% of greenhouse gas (GHG) emissions globally. Scope 1 and Scope 2 CO2 emissions from the sector (those incurred through mining operations and power consumption, respectively) amount to 1%, and fugitive methane emissions from coal mining are estimated at 3-6%.

“A significant share of global emissions – 28% – would be considered Scope 3 (indirect) emissions, including the combustion of coal.”

While there have been a number of high-profile mining companies making carbon emission pledges in the past 18 months – BHP pledging $400 million of investment in a low carbon plan being one notable example – the authors say the industry has only just begun to set emissions-reduction goals.

“Current targets published by mining companies range from 0-30% by 2030, far below the Paris Agreement goals, which may not be ambitious enough in many cases,” they said.

Through operational efficiency, and electrification and renewable-energy use, mines can theoretically fully decarbonise (excluding fugitive methane), according to the authors, with the disclaimer that building a climate strategy, “won’t be quick or easy”.

Water/heat

Water stress was one area the authors homed in on, saying that climate change is expected to cause more frequent droughts and floods, altering the supply of water to mining sites and disrupting operations.

The authors, using McKinsey’s MineSpans database on copper, gold, iron ore, and zinc, recently ran and analysed a water-stress and flooding scenario to emphasise the incoming problems.

The authors found that 30-50% of the production of these four commodities is concentrated in areas where water stress is already “high”.

“In 2017, these sites accounted for roughly $150 billion in total annual revenues and were clustered into seven water-stress ‘hot spots’ for mining: Central Asia, the Chilean coast, eastern Australia, the Middle East, southern Africa, western Australia, and a large zone in western North America,” the authors said.

The authors continued: “Climate science indicates that these hot spots will worsen in the coming decades. In Chile, 80% of copper production is already located in ‘extremely high’ water-stressed and ‘arid’ areas; by 2040, it will be 100%. In Russia, 40% of the nation’s iron ore production, currently located in ‘high’ water-stressed areas, is likely to move to ‘extreme’ water stress by 2040.”

And, mining regions not accustomed to water stress are projected to become increasingly vulnerable, according to the report.

By 2040, 5% of current gold production likely will shift from ‘low–medium’ water stress to ‘medium–high’; 7% of zinc output could move from ‘medium–high’ to ‘high’ water stress, and 6% of copper production could shift from ‘high’ to ‘extremely high’ water stress.

The authors said: “Depending on the water-intensiveness of the processing approach, such changes, while seemingly minor in percentage terms, could be critical to a mine’s operations or licence to operate.”

Mining executives in these regions are acutely aware of the water issue, according to the authors.

“For instance, Leagold Mining recently shut down its RDM gold mine in Brazil for two months because of drought conditions, even though it had built a dam and a water pipeline,” they said.

Even in areas with low water stress, certain water-intensive mining processes are jeopardised.

“In Germany – not a country known for being vulnerable to drought – a potash miner was forced to close two locations because of severe water shortages in the summer of 2018, losing nearly $2 million a day per site,” they said.

“The frequency and severity of these conditions are expected to increase along with the current climate trajectory.”

To improve resiliency, companies can reduce the water intensity of their mining processes, the authors said. They can also recycle used water and reduce water loss from evaporation, leaks, and waste. Mining companies can, for example, prevent evaporation by putting covers on small and medium dams.

In the long term, more capital-intensive approaches are possible, according to the authors. This could involve new water infrastructure, such as dams and desalination plants. Companies can also rely on so-called “natural capital”, like wetland areas, to improve groundwater drainage.

The authors said: “The option of securing water rights is becoming harder and can take years of engagement because of increased competition for natural resources and tensions between operators and local communities. Basin and regional planning with regulatory and civic groups is an important strategy but cannot alone solve the underlying problem of water stress.”

On the reverse, flooding from extreme rains can also cause operational disruptions, including mine closure, washed-out roads, or unsafe water levels in tailing dams, with flooding affecting some commodities more than others based on their locations.

The authors’ analysis showed iron ore and zinc are the most exposed to ‘extremely high’ flood occurrence, at 50% and 40% of global volume, respectively.

“The problem is expected to get worse, particularly in six ‘wet spots’ likely to experience a 50-60% increase in extreme precipitation this century: northern Australia, South America, and southern Africa during Southern Hemisphere summer, and central and western Africa, India and Southeast Asia, and Indonesia during Southern Hemisphere winter,” the authors said.

Companies can adopt flood-proof mine designs that improve drainage and pumping techniques, the authors said, mentioning the adaptation of roads, or the building of sheeted haul roads, as examples.

Moving to an in-pit crushing and conveying method would also help alleviate potential floods, replacing mine site haulage and haul roads with conveyors.

When it comes to incoming extreme heat in already-hot places – like China, parts of North and West Africa and Australia – the authors noted that worker productivity could fall and cooling costs may rise, in additon to putting workers’ health (and sometimes their lives) at risk.

“Indirect socioeconomic consequences from climate change can also affect the political environment surrounding a mine,” they said.

Shifting commodity demand

Ongoing decarbonisation is likely to have a major impact on coal – “currently about 50% of the global mining market, would be the most obvious victim of such shifts”, the authors said – but it would also affect virgin-ore markets.

“In a 2°C scenario, bauxite, copper, and iron ore will see growth from new decarbonisation technologies offset by increased recycling rates, as a result of the growing circular economy and focus on metal production from recycling versus virgin ore,” they said.

At the other end of the spectrum, niche minerals could experience dramatic growth. As the global electrification of industries continues, electric vehicles and batteries will create growth markets for cobalt, lithium, and nickel.

Emerging technologies such as hydrogen fuel cells and carbon capture would also boost demand for platinum, palladium, and other catalyst materials, while rare earths would be needed for wind-turbine magnets.

The authors said: “Fully replacing revenues from coal will be difficult. Yet many of the world’s biggest mining companies will need to rebalance non-diverse mineral portfolios.

“Many of the largest mining companies derive the bulk of their earnings from one or two commodities. Copper-heavy portfolios may benefit from demand growth due to widespread electrification, for example. And iron ore- and aluminium-heavy portfolios may see an upside from decarbonisation technologies, but they are also more likely to be hit by rising recycling rates.”

According to the authors, the mining industry generates between 1.9 and 5.1 gigatons of CO2-equivalent of annual greenhouse gas (GHG) emissions. Further down the value chain (Scope 3 emissions), the metals industry contributes roughly 4.2 gigatons, mainly through steel and aluminium production.

To stay on track for a global 2°C scenario, all sectors would need to reduce CO2 emissions from 2010 levels by at least 50% by 2050, they said.

To limit warming to 1.5°C, a reduction of at least 85% would likely be needed.

“Mining companies’ published emissions targets tend to be more modest than that, setting low targets, not setting targets beyond the early 2020s, or focusing on emissions intensity rather than absolute numbers,” the authors said.

To estimate decarbonisation potential in mining, the authors started with a baseline of current emissions by fuel source, based on the MineSpans database of mines’ operational characteristics, overlaid with the possible impact of, and constraints on, several mining decarbonisation levers.

The potential for mines varied by commodity, mine type, power source, and grid emissions, among other factors.

“Across the industry, non-coal mines could fully decarbonise by using multiple levers. Some are more economical than others – operational efficiency, for example, can make incremental improvements to the energy intensity of mining production while requiring little capital expenditure,” they said. Moving to renewable sources of electricity is becoming increasingly feasible too, even in off-grid environments, as the cost of battery packs is projected to decline 50% from 2017 to 2030, according to the authors.

“Electrification of mining equipment, such as diesel trucks and gas-consuming appliances, is only starting to become economical. Right now, only 0.5% of mining equipment is fully electric.

“However, in some cases, battery-electric vehicles have a 20% lower total cost of ownership versus traditional internal-combustion-engine vehicles. Newmont, for example, recently started production at its all-electric Borden mine in Ontario, Canada.”

The authors said: “Several big mining companies have installed their own sustainability committees, signalling that mining is joining the wave of corporate sustainability reporting and activity. Reporting emissions and understanding decarbonisation pathways are the first steps toward setting targets and taking action.”

Yet, these actions are currently too modest to reach the 1.5-2°C scenario and may not be keeping up with society’s expectations – “as increasingly voiced by investors seeking disclosures, companies asking their suppliers to decarbonise, and communities advocating for action on environmental issues”.

They concluded: “Mining companies concerned about their long-term reputation, licence to operate, or contribution to decarbonisation efforts may start to consider more aggressive decarbonisation and resilience plans.”

ICMM looks to align mining industry on cleaner, safer vehicles

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When the International Council on Mining and Metals (ICMM) launched its Innovation for Cleaner, Safer Vehicles (ICSV) program just over a year ago, some industry participants may not have realised how much progress could be made so quickly by taking a collaborative approach.

The ICMM has proven influential across the mining industry since its foundation in 2002 in areas such as corporate and social governance, environmental responsibility, and stakeholder relations, yet it has rarely, until this point, engaged directly as an industry group with original equipment manufacturers (OEMs) and service providers.

Close to 12 months after being established, it’s clear to see the program and the council itself has been successful in bridging a divide.

It has been able to corral a significant portion of the mining and mining OEM market players into a major industry discussion on core focus areas set to dominate the sector for the next two decades.

Now 27 of the world’s leading mining companies and 16 of the best-known truck and mining equipment suppliers are collaborating in a non-competitive space “to accelerate the development of a new generation of mining vehicles that will make vehicles cleaner and safer,” the ICMM says.

The ICSV program was created to address three of the most critical safety, health and environment performance issues in the ICMM’s mission towards zero harm and decarbonisation. Achieving this goal would involve the industry introducing and adopting the next generation of equipment to respond to the challenges.

More specifically, the program aims to:

  • Introduce greenhouse gas emission-free surface mining vehicles by 2040;
  • Minimise the operational impact of diesel exhaust by 2025; and
  • Make collision avoidance technology (capable of eliminating vehicle related collisions) available to mining companies by 2025.

In all three, it seeks to address the industry’s innovation challenge of ‘who motivates who’ or the chicken and egg analogy, according to Sarah Bell, Director, Health, Safety and Product Stewardship for the ICMM.

“You can imagine a mining company saying, ‘we can’t adopt technology that doesn’t yet exist’ or an OEM saying, ‘we can’t invest in development because we’re getting mixed market signals’. This is, of course, why this program has been set up in the way it has,” she told IM. “Bringing both the mining company and OEMs together, they have been able to work through these normal innovation challenges and align on defining the direction of travel and critical complexity to be solved for each of the ambitions set.”

High-level participation

The list of companies the ICMM has been able to involve in this program is impressive.

It is being guided by a CEO advisory group of six; three from the mining community – Andrew Mackenzie (CEO, BHP), Mark Cutifani (CEO, Anglo American) and Nick Holland (CEO, Gold Fields) – and three from the mining equipment supply side – Denise Johnson (Group President of Resource Industries at Caterpillar), Max Moriyama (President of the Mining Business Division at Komatsu) and Henrik Ager (President of Sandvik Mining and Rock Technology).

On the mining company front, ICMM membership makes up around 30% of the total metal market share, with some 46% in copper, 27% in gold and 42% in iron ore. Participating OEMs and third-party technology providers, meanwhile, include the three majors above, plus Cummins, Epiroc, Wabtec Corporation (formerly GE), Hexagon Mining, Hitachi Construction Machinery, Liebherr, MacLean Engineering, MTU, Modular Mining Systems, PBE Group, Nerospec, Future Digital Communication and Miller Technology.

Bell says the high-level participation builds the “widespread confidence” needed to accelerate investment in these three key areas”, while the ICMM’s focus on the leadership side of the technology integration equation and change management has proven “absolutely key”.

She clarified: “This collaboration operates under anti-competition and anti-trust rules. Our role is to convene the parties, motivate action and promote solutions.”

The program offers a “safe space for the OEMs and members to work openly in a non-competitive environment”, she added, explaining that the aim is not to come up with “preferred technologies”, but define the “functional and operational pathways required to meet the ambitions set”.

Vehicle interaction (VI)

Some of the ambitions look easier to achieve than others.

For instance, collision avoidance and proximity detection technology has made huge strides in the last decade, with the ICMM arguing its 2025 target is like a “sprint”, compared with the “10,000 m race” that is minimising DPM underground by 2025 and the longer-term aim to introduce GHG-free surface mining vehicles by 2040.

“There are regulations that require implementation of collision avoidance and proximity detection technology by the end of 2020 in South Africa,” Bell said. This will undoubtedly provide a catalyst for further developments to speed up.

The ICSV program is also leveraging the work of the Earth Moving Equipment Safety Round Table (EMESRT) in its development of fundamental functional/performance requirements for operators and technology providers.

These requirements were updated and released by EMESRT in September and are known as ‘PR5A’.

Credit: Hexagon Mining

Bell delved into some detail about these requirements:

“The EMERST requirements are designed around a nine-level system that seeks to eliminate material unwanted scenarios such as – equipment to person, equipment to equipment, equipment to environment and loss of control,” she said.

“The fundamental change with this newly released set of functional requirements by EMESRT is that the mining industry users have defined the functional needs for levels 7-9 (operator awareness, advisory controls, and intervention controls). That stronger level of collaboration hasn’t necessarily been there.”

EMESRT and its guidelines have been given an expanded global platform through the ICMM’s ICSV, with the program, this year, providing the convening environment for users and technology providers to help finalise these updated requirements, according to Bell.

With all of this already in place, one could be forgiven for thinking the majority of the hard work involved with achieving the 2025 goal is done, but the working group focused on VI knows that while OEMs continue to retrofit third-party vehicle collision and avoidance systems to their machines the job is not complete.

“Let’s think about the seatbelt analogy: you don’t give buyers of vehicles a choice as to whether they want a seatbelt in their car; it just comes with the car,” Bell said.

“At the moment, by design, vehicles don’t always have this collision and avoidance systems built in, therefore there is a big opportunity for collaboration between OEMs and third-party technology providers.”

Underground DPM goals

“The DPM working group have recognised that, in the case of the DPM ambition, ‘the future is already here, it’s just unevenly distributed’,” Bell said.

“Bringing together the OEMs and the mining companies this year through the ICSV program has enabled the group to explore the variety of existing solutions out there today,” she added.

These existing solutions include higher-tier engines, battery-electric equipment, tethered electric machinery, fuel cell-equipped machines for narrow vein mining and solutions to remove DPMs and other emissions from the environment like Johnson Matthey’s CRT system.

And, there are numerous examples from North America – Newmont Goldcorp at Borden, and Glencore and Vale in Sudbury – South America – Codelco at El Teniente Underground – and Europe – Agnico Eagle Mines at Kittilä (Finland, pictured) – to draw from.

Bell also mentioned some examples from Australia where regulatory changes have seen miners apply existing technology and carry out changes in their work plans and maintenance practices to minimise DPM emissions.

Haulage and loading flexibility, battery charging and mine design have all come under the spotlight since these new generation of ‘green’ machines have emerged, so achieving the 2025 goal the ICSV stated is by no means a foregone conclusion.

“There remains more work to do in achieving diesel-free vehicles underground,” Bell said.

The interested parties are aware of this and the program’s DPM maturity framework is helping miners and OEMs plot a course to reaching the target, she explained.

“The DPM maturity framework promotes existing solutions available today that would enable a mining operation to reduce their DPM emissions to a level that would meet the ambition level (shown as Level 4 – transition to zero),” she said.

These frameworks are useful for starting a “change conversation”, Bell said, explaining that mining companies can assess within their organisations where they currently sit on the five-level chart and discuss internally how to move up the levels to meet their goals.

These same frameworks look beyond minimising “the operational impact” of DPM emissions underground, with Bell explaining that Level 5 of the maturity framework involves “non-DPM emitting vehicles”.

GHG-free surface mining vehicles

Even further in the distance is the longer-term target of introducing greenhouse gas emission-free surface mining vehicles by 2040.

This ambition, more than any other, is less clearly defined in terms of technological solutions across the industry.

While battery-electric solutions look like having the goods to reach DPM-free status underground with expected developments in battery technology and charging, the jury is still out on if they can create a GHG-free large-scale open-pit mining environment.

The world’s largest battery-electric haul truck – eMining’s 63-t payload eDumper (pictured) – may have proven its worth at a Ciments Vigier-owned quarry in Switzerland, but the world’s largest open-pit mines require a solution on another scale altogether.

As Bell said: “There is a lot of work to do to develop batteries at scale for surface fleet that suit the different operating conditions.

“That’s a key point because that lends itself to the fact that we don’t want one solution; we will need multiple solutions. We don’t want to stifle innovation; we want to encourage it.”

ICMM member Anglo American has hinted that hydrogen power could be one solution, and the miner is looking to show this next year with the development of its hydrogen-powered 300-t payload haul truck.

There has also been in the last 18-24 months a mini renaissance of trolley assist projects that, ABB’s Gunnar Hammarström told IM recently, could, in the future, work in tandem with battery-powered solutions to provide a GHG-free solution.

The ability for industry to pilot and validate technology options like this “within the boundaries of anti-competition” is crucial for its later adoption in the industry, Bell said.

She said a key enabler of industry decarbonisation is access to cost competitive clean electricity, which would indicate that regions like South America and the Nordic countries could be of interest in the short and medium term for deploying pilot projects.

It is this goal where the industry R&D spend could potentially ramp up; something the ICMM and the ICSV is aware of.

“For the OEMs and mining companies to effectively minimise capital expenditure, optimise R&D expenditure and reduce the change management required by the industry, there needs to be a careful balance of encouraging innovation of solutions, whilst managing the number of plausible outcomes,” Bell said.

In terms of encouraging the development of these outcomes, carbon pricing mechanisms could provide some positive industry momentum. Vale recently acknowledged that it would apply an internal carbon tax/price of $50/t when analysing its future projects, so one would expect other companies to be factoring in such charges to their future mine developments.

Industry-wide GHG emission caps could also provide a catalyst. In countries such as Chile – where up to 80% of emissions can come from haul trucks, according to ICMM Senior Programme Officer, Verónica Martinez – carbon emission reduction legislation could really have an impact on technology developments.

Forward motion

While 2019 was a year when the three working groups – made up of close to 50 representatives in each work stream – outlined known barriers or opportunities that might either slow down or accelerate technology developments, 2020 will be the year that regional workshops convened to “encourage first adopters and fast followers” to move these three ambitions forward take place, Bell said.

A knowledge hub containing the previously spoken of maturity frameworks (delivered for all three groups) will allow the wider industry outside of the ICMM membership to gain a better understanding of how the miner-OEM-service provider collaboration is working.

Bell said the ICMM already has a number of members testing these group frameworks on an informal self-assessment basis to understand “how they are being received at an asset level and feedback insights to the group in an effort to understand how we may portray an industry representative picture of where we are today”.

Such strategies bode well for achieving these goals into the future and, potentially, changing the dynamic that has existed between end users and suppliers in the mining sector for decades.

Bell said: “The feedback that we got from OEMs is that mining companies had completely different objectives, but they have now greater confidence that we are aligned on the direction of travel towards the ambitions set.”