Tag Archives: Deloitte

Shell on the future of fuel switching

Environmental, Mining consumables, Mining services, Power supply for mines, Sustainable mining, , , , , , , , , , , , ,

Mark Hannan, General Manager for Mining Decarbonisation at Shell, explores how mining operators can switch their fleets from diesel to low-carbon fuels as part of a wider transition to zero-carbon fuels.

The mining industry is in need of decarbonisation but delivering change at pace is a real challenge. There is huge pressure to achieve this when, it is estimated, 10% of the world’s energy-related greenhouse gas (GHG) emissions come from primary minerals and metals production, according to Nature Geoscience Magazine (2020).

For a mining company to achieve their decarbonisation goals, it is beneficial to maximise the benefits in the short term while providing greater flexibility for the long term. One such area that offers opportunities for this is fuel switching in mining fleets.

Decarbonisation drives the need for alternative fuels

No matter what stage a mining business has reached on its pathway to decarbonisation, it is important to review how its mobile assets impact the environment. McKinsey shows that between 40-50% of CO2 emissions in mining come from the diesel used for mobile assets.

Due to concerns around diesel fumes in confined spaces, the problem is largely being solved in underground sites – with some due to run entirely on battery-electric assets in the near term. In open-pit mines, where equipment is larger, emissions from diesel fuel are a challenge still to overcome, which is why fuel switching is essential to decarbonisation.

However, there are still many elements to consider when making the business case for alternative fuels. This includes the performance of alternative fuels in comparison with diesel, the capital investment needed to implement them and how widely available they are. That is before analysing the benefits of meeting emissions targets against the higher cost of using low-carbon fuels.

A net-zero future is coming, but it is not here yet

In the longer term, there are two diesel alternatives that will offer key routes to effective fuel switching: hydrogen and electricity.

Hydrogen is set to play a significant role in the decarbonisation of every industry – not least those featuring hard-to-abate sectors like mining. As well as reducing emissions in overall energy use across sites, hydrogen will provide a low-carbon alternative to diesel that also delivers higher energy density to drive the performance of mobile assets.

Government support for hydrogen power is growing rapidly and it is an area in which Shell is working closely with customers and original equipment manufacturers (OEMs) to drive innovation and deliver supply at scale. However, with hydrogen supply dependent on elements such as the availability and cost of technology, land, water, storage and transport, it is an alternative that will only start to present real impact from 2030 and beyond.

For off-highway equipment in mining, fleet electrification is often seen as a more relevant near-term solution. This is not surprising as electric power can not only contribute to reduced emissions but also help businesses shift away from their exposure to volatile diesel prices – potentially leading to a positive impact on total cost of ownership (TCO).

To help deliver on the mining industry’s longer-term aspirations for fleet electrification, Shell is developing a suite of modular end-to-end solutions for mining heavy-duty vehicles that decarbonises haul trucks while minimising the operational impact of electrification in a scalable, interoperable and sustainable way.

When looking to make the switch to electrification, mining companies must address the significant escalation in power demand that would come with full-scale electrification. Also, they will want to know the electricity is generated from renewable sources – helping them to reduce their Scope 1 and 2 emissions. Electrification powered by renewable energy will be a significant driver of change for mining sites, which is why Shell is working to overcome the barriers to increasing its renewable capacity – such as the need for upgrades to the grid and storage capabilities.

Low-carbon fuels offer an immediate next step for mining businesses

Hydrogen and electrification represent the future of fuel for mobility in mining. But, in the short term, there is another alternative that can act as a transition fuel and help lower emissions while businesses wait for hydrogen and electricity to become viable at scale: low-carbon fuels.

There are two types of low-carbon fuels relevant to mobility in mining:

  • Biodiesel – also known as Fatty Acid Methyl Ester (FAME); and
  • Renewable diesel – also known as Hydrotreated Vegetable Oil (HVO)

Though both are derived from organic biomass like waste vegetable oils and animal fats, there are differences in their chemical composition owing to a different manufacturing process that impact their use. For instance, biodiesel is the more affordable choice, yet most OEMs place a limit on the percentage it is possible to blend with conventional diesel due to quality concerns such as storage stability and performance in cold temperatures. Renewable diesel more closely resembles the composition of conventional diesel, meaning it can be blended in any ratio up to a concentration of 100%, but is more expensive due to the complexity in refinery processing. Crucially, both fuels offer a route to emissions reduction in mining – and a combination of the two is likely to be needed.

These low-carbon fuels offer a more immediate solution to the challenges of fleet decarbonisation in mining, without making costly investments in infrastructure. Not only can they be used in existing heavy-duty diesel engines, but, as long as they are in accordance with manufacturer advice, they also require no infrastructure investment. This makes them a more affordable short-term option that enables businesses to reduce emissions today while working to implement the ecosystem needed to transition to hydrogen and electricity tomorrow.

Overcoming the challenges of availability at scale

The merits of low-carbon fuels for a sites’ mobility needs might already be clear. After all, the technology is mature and it is easy to implement – certainly compared with hydrogen and electricity. However, there are still barriers to overcome before we see widespread adoption in the mining industry.

Availability and affordability are the two critical challenges. Despite its maturity, supply of low-carbon fuels is tight – especially given the remote regions that mining operations usually take place in. The need to comply with regional regulations on renewable fuels is also driving rising demand. For example, the EU Commission’s renewable energy directive has proposed increasing its target for renewable energy sources consumption by 2030 to 45% (up from its current goal of 32%).

Also, mining is not the only sector looking to alternative fuels to drive decarbonisation, meaning businesses will need to compete and trade with areas like commercial road transport to source low-carbon options. With more users needing access to alternative fuels, premiums for low-carbon fuels remain high. This can make low-carbon fuels less affordable and risks undermining any TCO improvements businesses can expect to realise from fuel switching.

It means that businesses are hesitant to act today as they wait for more capacity and greater competition to arrive – even though mining cannot afford to delay its emissions reduction efforts. That is why, at Shell, we are working to deliver additional capacity and competition. As well as investing in new production facilities (including a new biofuels facility in the Shell Energy and Chemicals Park Rotterdam, which will produce sustainable aviation fuel and renewable diesel made from waste in The Netherlands once it comes onstream), we are using our existing relationships with OEMs to help mining businesses get the most out of the low-carbon fuels they do have access to.

Collaboration will be critical to fuel switching success

Ultimately, if mining businesses are to meet their regulatory responsibilities while driving performance, they will need to unlock the opportunity that fuel switching provides. From low-carbon fuels to electrification to hydrogen, there is huge potential to reduce emissions while improving the TCO of mining mobility.

Successful fuel switching will require close collaboration with partners and suppliers to create a new fuel ecosystem by improving the availability and affordability of alternatives to conventional diesel. Only by working together will we deliver a new fuel future for mining, which is why Shell Mining is committed to supporting the industry on every step of its decarbonisation journey.

Photo credit: Getty Images

Former BHP data strategist to lead open-pit mining equipment data specialist MaxMine

Communications in mining, IoT, Mining people, Mining services, Mining software, , , , , , , , , ,

Former BHP Global Data Strategy Lead, Coert Du Plessis, has been appointed as the Chief Executive Officer of mining technology business MaxMine.

Du Plessis commenced in the role of Chief Operating Officer of MaxMine on May 1, 2020, working with MaxMine’s management team behind the scenes over the past 12 months to successfully configure and guide MaxMine through its significant Series A funding round announced last month, the company said.

MaxMine is an automated, high-resolution data-based business reporting tool that combines advanced data acquisition technology with AI analysis to fully optimise mobile equipment and operator performance within mining and other mobile equipment-based operations, measuring performance differently and using gamification to change behaviours.

On July 1, 2021, Du Plessis was appointed Chief Executive Officer of the company.

Du Plessis commenced his professional career with global consulting firm, Deloitte, moving up the ranks to become senior partner before the age of 40. He then established and led the firm’s Western Australia data analytics practice. He then moved to BHP to accelerate the adoption of digital technologies and cultivate collaborative ways of working. His scope at BHP included the design and establishment of an Innovation Mine at BHP’s Eastern Ridge operations in Western Australia, developing the BHP Dahling Industrial IoT platform, embedding next generation digital technologies at existing operations and major new capital projects – such as Jansen – and steering the final technology investment review of the South Flank iron ore project.

Du Plessis said three things ultimately convinced him to move from BHP to take up the new roles at MaxMine:

  • “One, the calibre of the existing leadership team and their adaptive business mindset; demonstrated in successfully raising growth capital in a year disrupted by COVID;
  • “Two, generating industry leading data quality and confidence in their results, an order of magnitude better than incumbent fleet management system. It means MaxMine users transition from teams arguing about the validity of data to knowing what needs to be done next; and
  • “Three, the ability to over-come digital inertia and drive technology adoption with front line operators and operational leadership teams month in and month out.”

He added: “It was inspirational to see the speed at which the MaxMine team could develop these incredible technologies and develop the unique delivery approaches whilst maintaining an incredible focus on customer value.

“MaxMine has gone further than any other technology product and service I have come across in solving the challenge of delivering consistent value for mine site operations. The quality of MaxMine’s data asset sets us apart in the industry, and we believe we can apply the same operational improvement approach that allows us to enable delivery of more tonnes of ore, to also significantly reduce CO2 tonnes expelled in mining operations. Moving beyond the growing list of CO2 reduction aspirations to reductions delivered is an outcome I deeply care about.”

MaxMine Director, Robin Schleich, who is also Dupont Sustainable Solutions’ global operations director, said: “Mining companies need, and want, to partner with true industry innovators such as MaxMine to help them navigate the ramp up in digital disruption in the industry and combat growing operational cost pressures.

“Based on the significant investment last month, it is clear MaxMine provides one of the strongest platforms to drive industry productivity and emissions transformation.”

MaxMine’s outgoing CEO, Tom Cawley, will transition to Executive Chair, focusing on adjacent business opportunities for the company and setting up the board to support the company’s growth.

Deloitte builds out operational transformation services offering with Global IO

Automation, IoT, Mining services, Mining software, , , , , ,

Deloitte has acquired Global IO, a leader in integrated operations (IO) in the energy and resources (E&R) and mining sectors, as the Fortune 500 company aims to offer clients a “complete delivery of operational transformation services”.

Founded in Perth, Australia, in 2014, Global IO operates globally and has offices in Montreal, Perth, and Santiago, Chile.

In mining, specifically, companies have looked to leverage integrated operations to improve productivity and lower their cost base. Majors like Rio Tinto (remote operations centre, pictured above), BHP and Vale have installed remote integrated operations centres to coordinate iron ore production hubs in Australia and Brazil, respectively.

Global IO is joining Deloitte’s Consulting practices in Canada, Chile and Australia, more specifically as part of the operations transformation offering.

Anthony Viel, CEO, Deloitte Canada, said: “This addition is a key differentiator for our firm, and a major win for our clients who will truly benefit from a one-stop shop approach. Global IO’s strong reputation, deep relationships within the E&R and mining sectors, and credibility will allow us both to expand our efforts and provide dependable services to our clients from start to finish in a more agile and deliberate way.”

By joining Deloitte, Global IO will significantly expand its services, including how it engages in change management, project management, analytics, and digital strategy opportunities, as well as a range of unique operational productivity improvement projects.

“The collaboration with Global IO, which in the past has successfully worked with Deloitte on several large engagements with key clients, will also further the firm’s qualifications and capabilities in delivering end-to-end integrated operations projects independently,” Deloitte said.

With a team of qualified professionals in design, implementation, operations management process, and integrated operations deployments in the E&R and mining sectors, 17 Global IO employees will be joining the firm across offices in Montreal, Vancouver, and Calgary (Deloitte Canada), Santiago (Deloitte Chile), and Perth (Deloitte Australia). Global IO partners joining Deloitte include: Dominic Collins, Partner, Deloitte Chile; Pieter Lottering, Principal, Deloitte Australia; and Eamonn Treacy, Director, Deloitte Canada.

Collins said: “This is a great opportunity for us to not only better serve our clients under the banner of Deloitte, but to expand our services with new resources, to broaden our scale and scope. We’re now able to increase our efforts in areas like change management, digital strategy, and analytics, and deliver dependable services our customers, and Deloitte’s, have come to expect.”

Deloitte to help digitalise MMK’s iron and steel operations

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Magnitogorsk Iron and Steel Works (MMK) says it has partnered with Deloitte CIS to create a digitalisation strategy for the company.

The agreement, signed during the St Petersburg International Economic Forum, will see Deloitte CIS prepare a roadmap for the digitalisation of the company over the medium term.

MMK said it decided to update its digital portfolio as part of the company’s overall development strategy up to 2025.

The strategy will include the most effective projects to help MMK “achieve strategic goals faster and significantly improve the company’s business efficiency”, it said.

MMK and Deloitte have a long-standing relationship and, according to MMK, Deloitte has repeatedly shown its high level of expertise on a wide range of issues of strategic importance for MMK.

Andrey Eremin, Director for Economics at MMK, said: “I hope that our cooperation in the field of digital transformation will be just as effective and bring both sides beneficial results.”

According to the results of a preliminary study, Deloitte experts said there is significant potential for the use of advanced technologies at MMK, according to the Russia-based iron and steel maker. “This is because the company has an extensive digital history, as well as a production database which is updated in real time,” it said.

Alexander Oleynik, Director of Strategy and Operations at Deloitte CIS, said: “The MMK team’s long-standing commitment to implementing information systems to manage technical and production quality, as well as traceability, have made an excellent foundation for the business.

“In turn, Deloitte will bring cross-sectoral knowledge and innovation experience to the partnership, which will allow us to fully capitalise on MMK’s digital potential and form plans for its further development.”

Miners need to spell out future value drivers to survive, Deloitte says

Automation, Environmental, High tech minerals, Mineral commodities, Mineral project development, Mining services, Mining software, Mining techniques, Power supply for mines, Sustainable mining, Water management, , , , , , , , , , , ,

In Deloitte’s Tracking the Trends 2019 report, the company has urged mining companies to clarify how they plan to drive value into the future how they intend to respond when prices inevitably drop again.

The report highlighted disruption and volatility as two key issues the mining sector is facing that made long-term planning and decision making more important.

“In this new world order, miners must go beyond communicating the value that they currently bring to communities and will need to articulate what they stand for by developing differentiated business models designed to drive long-term value,” Deloitte said in the report.

Deloitte’s ten trends to watch for 2019 included:

  • Rethinking mining strategy;
  • The frontier of analytics and artificial intelligence;
  • Managing risk in the digital era;
  • Digitising the supply chain;
  • Driving sustainable shared social outcomes;
  • Exploring the water-energy nexus;
  • Decoding capital projects;
  • Reimagining work, workers, and the workplace;
  • Operationalising diversity and inclusion programmes, and;
  • Demanding provenance.

On rethinking mining strategy, Deloitte said: “Mining companies have typically anchored their strategic planning on producing the highest volumes of ore at the lowest possible cost. However, in today’s environment, companies must take an ever-expanding range of issues into account when setting corporate strategy.

“Consumers, governments, and communities are becoming more vocal and irrevocably altering industry dynamics. As a result, corporate social responsibility initiatives are now morphing into stakeholder engagement programmes, and social license to operate is becoming a pivotal strategic issue that will either differentiate mining companies or derail them.

“Looking at these factors alone – consumer awareness, social license to operate, geographic risk, and access to input commodities – it becomes clear that mining companies must take an ever-expanding range of issues into account when setting corporate strategy if they hope to create competitive portfolios robust enough to generate value across multiple scenarios. This is especially critical as the industry shifts into a new stage of growth.”

On the frontier of analytics and artificial intelligence, Deloitte said: “Although mining companies are exploring and investing in analytics and AI, there is still a long way to go. Three horizons in AI are emerging and, to date, most organisations are working in Horizon One, where machine intelligence requires human assistance and interpretation.

“To move up the analytics maturity curve into Horizons Two and Three, organisations must answer progressively complex questions. The first is ‘what happened?’ The second is ‘why did those things happen?’, this allows organisations to identify the root causes.

“Only with this foundation in place can organisations answer the third question: “what will happen?” This is the key that empowers organisations to predict variability, mitigate emerging risks, and manage stakeholder expectations.”

On managing risk in the digital era, Deloitte said: “The current risk landscape is characterised by a host of issues such as mounting tariffs and sanctions, potential trade wars, cyber threats, uncertain tax and royalty regimes, rising input costs, heightened scrutiny from the investment community, environmental disasters, and infrastructure breakdowns.

“To stem this tide, mining companies must take their cue from organisations that take a more holistic view of risk. Increasingly, these leaders are moving towards the next generation of internal audit, Internal Audit 3.0.

“This approach should help mining companies address risk at an enterprise-wide level, rather than assessing isolated risks at the functional or mine site level and develop appropriate controls to both mitigate and manage the expanding array of risks they face.”

On digitising the supply chain, Deloitte said: “The mining supply chain is ripe for transformation, as supply chain improvements remain incremental instead of delivering innovations designed to optimise mining operations.

“To create a more interconnected and responsive supply chain, mining companies need to stop thinking in linear terms and imagine instead a circular system that we call the digital supply network.

“The ultimate goal is to leverage advanced algorithms, AI, and machine learning to turn data into insights that allow companies to reduce their capital expenditures, respond to changing project requirements quickly, and optimise mine planning to integrate real-time changes.”

On driving sustainable shared social outcomes, Deloitte said: “Until recently, mining companies’ social spend has been seen as a cost of compliance, rather than a way to deliver measurable and sustainable benefits to host countries and communities. If mining companies hope to drive different social outcomes, that dynamic has to change. A social enterprise is an organisation whose mission combines revenue growth and profit making with the need to respect and support its environment and stakeholder network.

“Finding value beyond compliance is no easy task. It requires miners to listen more closely to their constituents to determine what stakeholders truly want, and then to shift their operational processes in response.

“To deliver on the social breadth of these programmes, mining companies cannot work in isolation. Instead, they should look for opportunities to collaborate with other companies working in the region.”

On exploring the water-energy nexus, Deloitte said: “True value from energy management can only be derived by addressing the triple bottom line of social, environmental, and financial performance. This requires companies to approach energy management as an integrated corporate initiative.

“Yet energy isn’t the only input at risk. Mining companies must now contend with water scarcity as well as risks associated with excess rainfall, which can result in flooding.

“With a constant knowledge of how every drop of water is being used, and an understanding of all the parameters associated with its use, mining companies can manage water in the way they have begun to manage electricity, as a valuable resource.”

On decoding capital projects, Deloitte said: “Burdened by years of sub-par returns, cost overruns, and impairment charges, many mining companies opted to concentrate on maximising output from their existing operations rather than investing in new mine supply and exploration.

“This resulted in supply shortages for commodities such as copper, zinc, cobalt, lithium, and gold. But with the cycle turning, mining companies will need to engage in a wave of new capital projects to offset production declines and meet demand.

“To overcome these challenges, mining companies must build their maturity in five key areas: delivery models, data and technology, project controls, license to operate and collaboration.”

On reimagining work, workers, and the workplace, Deloitte said: “The mining industry is facing a changing talent landscape, with digitisation necessitating new skillsets, a massive generational shift when considering C-suite succession planning and a younger generation of workers who measure loyalty to an employer in months instead of years.

“To prepare for this imminent future, organisations need to clarify not only their business goals and aspirations, but also the role that their talent strategy should play to deliver on them.

“They will also need to identify the workers of the future by considering what the employee experience will look like, and the role that innovation will play in that experience. Finally, they must reconceive how employees will interact with each other and conduct their work, be it in a physical location or remotely.”

On operationalising diversity and inclusion programmes, Deloitte said: “The mining industry is not attracting sufficient numbers of diverse candidates and, to shift this balance, companies will not only need to change their talent attraction and retention policies, they will also need to change historical perceptions about the mining industry.

“Instead of approaching the issue by adopting point initiatives, they must design integrated programmes to tackle the challenge holistically. This extends into the area of talent retention, because when companies do attract women, they often struggle to retain them.

“In tandem with shifting the way they operate, mining companies must take steps to amend their public image. This starts with the image they portray on their reports and in their advertisements.”

And, finally, on demanding provenance, Deloitte said: “Rising demand for electric vehicles (EVs) is increasing demand for EV battery materials such as cobalt, lithium, graphite, and copper.

“However, socially-conscious consumers are now questioning the provenance of raw materials. As a result, downstream customers, such as automotive manufacturers and technology giants, are demanding ethically-sourced minerals.

“This is putting unprecedented pressure on mining companies to create a more transparent interface with their customers and driving the adoption of technologies such as blockchain to enhance the traceability of commodities.”

To download the full report, go to deloitte.com/trackingthetrends

Deloitte urges miners to take proactive approach to disruptive technology, cybersecurity

Automation, Base metals, Coal technology, Environmental, High tech minerals, Industrial minerals, IoT, Mineral exploration, Mineral processing, Mineral project development, Mining equipment, Mining services, Mining software, Mining techniques, Power supply for mines, Precious metals, Steel and iron ore, Water management, , , , ,

Professional services company Deloitte today has released two global mining reports to coincide with the opening of the International Mining and Resources Conference (IMARC) in Melbourne, Australia.

The two reports explore cyber risk (An integrated approach to combat cyber risk: securing industrial operations in mining) and human capital trends (Beyond HR: rethinking work and operations in the mining industry) and their impact on the global mining sector.

Deloitte’s National Mining Leader, Ian Sanders said that based on findings from both reports, organisations needed to prepare for the changes that would come with developing future mines.

“Disruptive technologies are prompting massive transformation for mining companies,” Sanders said, adding: “A survey of energy and resources leaders reveals 76% consider artificial intelligence and robotics as critical factors for success but just 31% are ready to adopt the technology.”

The cyber risk report examines how cyber threats are disrupting the mining value chain and outlines approaches companies can take to secure their operations.

“Despite cyber attacks growing in number and sophistication across many industries, the mining industry has been spared in comparison,” Sanders said.

“But as the industry advances towards digitalisation and intelligent mining, it’s becoming more and more important to proactively secure operations against cyber threats.”