Tag Archives: Graeme Stanway

Tax incentives needed to drive electrification of Australia’s mining fleet: EMC report

The mining industry is at a crossroads as latest industry insights reveals that electric mines can operate at costs between 56% and 88% lower than their diesel-powered counterparts.

However, just 60% indicate that their next mining operation will transition to electric.

Nearly all (84%) of industry professionals believe that Australia’s mining sector will not meet the government’s goal of achieving 82% renewable energy penetration by 2030.

These startling numbers were published within the ‘Electric Mine Consortium: 2020 to 2024: What we learnt from four years of a radical experiment in cross-company collaboration to build a zero particulae and zero carbon mining industry’ report.

The primary barrier to adopting electric equipment, cited by 76% of miners, is the high capital cost, which is rated 1.5 times more significant than the next major concern: confidence in operational effectiveness.

The report went into this a little more, stating: “There are several reasons why Australian miners have not adopted battery-electric underground load and haul equipment, while around 15% of Sandvik’s Canadian and European order book is battery electric.

“The overriding reason is a lack of clear policy support in Australia. Canada has had clear air quality standards for some time, leading most famously to the Borden mine’s first move to electrify. In support of this are a price on carbon, a 30% capital tax write-off for electric equipment and supporting infrastructure and substantial grants to fund early fleet adoption, such as the Canadian Government’s funding of A$12 million ($8.3 million) to fully electrify Glencore’s Onaping Depth mine.

“In contrast, Australia maintains a generous diesel fuel tax credit that will cost Australian taxpayers A$37 billion between 2024 and 2030.

“For BHP’s iron ore operations in 2023 alone, this tax credit is worth over A$500 million. Unsurprisingly, while BHP has committed to large electrification of its Chilean fleet of 200-plus heavy haul trucks before 2030, any electrification targets in Australia are for the period 2030 to 2040. This is seemingly a policy difference laid bare. As of 2024, Chile imposes a tax on diesel for miners (of around $0.12 per litre), whereas Australia does not.

“The Australian mining industry is also not subject to a universal price on carbon, at any price, unlike Canada and Europe. The closest policy instrument is the Safeguard Mechanism, but this covers only 200 facilities in Australia, of which most are coal mines or LNG facilities. At a 100,000 t C02-e per annum threshold, only a small handful of large iron ore mines are captured as well as very large base metals mines
like Olympic Dam and Newmont’s Telfer gold mine, and downstream alumina and aluminium processing facilities. The vast majority of mines are not subject to a compulsory carbon market.

“In a more subtle way, our mining regulations are also a major challenge to electrification. In Western Australia, ventilation regulations do not differentiate between diesel or electric equipment, which means that the ventilation benefits from using electric equipment, estimated to be anywhere from 20 to 40%, cannot be captured.”

In light of these findings, the industry is urging the government to implement tax incentives to accelerate the decarbonisation of mine sites.

“With diesel particulates posing severe health risks such as lung cancer, and with current Australian standards being over 6x higher than level considered safe by Safe Work Australia for underground miners, electrification is not just an economic opportunity; it’s a health imperative,” Graeme Stanway, Chair of the Electric Mine Consortium, said. “Investing in cleaner technologies can eliminate these hazards and support our commitment to sustainability.”

This is also where the EMC come up with their operating cost reduction assumptions (see table below):

Base case Scenario 1

New technology, new economics

Scenario 2

Global carbon pressure

Scenario 3

Technology and external pressures align

Fleet capex OEM quotes Sep 2024

BEV up to 50% higher

BEV matches diesel equivalent OEM quotes Sep 2024

BEV up to 50% higher

BEV matches diesel equivalent
Fleet lifecycle  

15,000 hrs

 

20,000 hrs 15,000 hrs 20,000 hrs
Battery performance Sep 2024 performance 30% improvement Sep 2024 performance 30% improvement
Employee costs Typical Australian labour rates 5% labour cost reduction 5% labour cost reduction 5% labour cost reduction
Energy costs Diesel $AU1.20/L Diesel $AU1.20/L Diesel A$1.70/L

(Aus rebate removed)

Diesel A$1.70/L

(Aus rebate removed)

Product premium Gold price US$2,000/oz US$2,000/oz +5% premium +5% premium
Carbon costs  

No carbon cost

 

No carbon cost Carbon A$100/tCO2-e Carbon A$100/tCO2-e
 

Net present cost

 

120% of diesel 88% of diesel 87% of diesel 56% of diesel

These findings are based on the first and most extensive collaborative financial modelling exercise on mine decarbonisation undertaken in the Australian mining industry, allowing executives to identify to granular detail the risks, opportunities and pathways to electrify.

Mark Norwell, Managing Director & CEO of Perenti, whose business recently teamed up with their client IGO and business partner ABB, to complete one of the first studies of converting an underground mine’s fleet from diesel vehicles to BEVs, said all stakeholders had a role to play in the shift to mine electrification.

“The study we recently conducted demonstrates that we are getting closer to an all-electric mine and that collaboration is the key to make it happen,” he said.

“We are optimistic that in time an electric underground mine will be the most economic and socially responsible mining method. The electrification of underground mines will deliver significant benefits to health, environment and cost.”

The CEO of Sandfire, Brendan Harris, noted, “Our purpose is to mine copper sustainably to energise the future, so we welcomed the opportunity to collaborate with industry peers to build a deeper understanding of electrification. Renewable energy already accounts for 73% of our electricity needs and we have a decarbonisation plan to reduce emissions by 35% by 2035 and achieve Net Zero emissions by 2050.”

Ivan Vella, Managing Director and CEO of IGO Limited, added, “Our collective journey toward decarbonisation will only be achieved through collaboration and cooperation across our industry. More than just helping demonstrate the value case for mine electrification, the EMC has facilitated the sharing of findings and been an effective advocate for our industry as we pursue our respective decarbonisation roadmaps.”

Context: Mining and environmental sustainability

  • The global mining industry contributes 8% of total emissions;
  • Over 80% of listed miners have committed to net-zero targets;
  • Currently, less than 10% of the Australian mining sector utilises renewable energy;
  • While 15% of Sandvik’s global haul truck production is battery-electric, no BEVs have been sold in Australia to date for on-going load and haul production; and
  • It is estimated 90% of the mining workforce will experience hearing impairment by age 50.

Specific areas of cost reduction

Transitioning to electric mines presents substantial benefits, including:

  • A 100% reduction in Scope 1 & 2 emissions for fully electric mines powered by renewables;
  • Up to 30% reduction in overall operating costs;
  • Up to 50% reduction in energy costs;
  • A 20% decrease in maintenance costs; and
  • A 30% reduction in ventilation costs.
Bortana-South32

The EMC ready to hand over the baton in mining’s decarbonisation race

The Electric Mine Consortium is not Graeme Stanway’s first innovation rodeo. As the founder of State of Play, a global research platform in natural resources, energy and infrastructure, which also publishes the largest survey on strategy and innovation in mining, he has engaged with many individual and groups of companies looking to spur on mining innovation.

State of Play is the custodian of the EMC and is responsible for bringing almost 20 companies all focused on accelerating progress towards the fully electrified zero CO2 and zero particulates mine together.

Stanway, as Chair of the EMC, has had a front row seat for this journey over the last four years, and was aware the time would come to ‘wrap up’ the consortium’s proceedings – expected on September 30.

“We always knew it was a fixed term,” he told IM. “To be honest, I thought it would be sooner. When we first started, a three-year engagement period sounded about right if things worked well. There is only so long you can keep a core group of companies and people on such an intense innovation journey.”

Four years might sound short – according to Stanway and State of Play’s data it’s the average period that business’ plan their innovation journeys for – but the electrification landscape has changed substantially in that period.

“When we started there was no significant electrification simulation capability, not really any specialised consulting, limited engineering services,” he said. “Now, you can go out and get a study and people are already building mines that are 90% powered off renewables. We also have metrics being introduced that could have a noticeable impact on the way projects go through FIDs.

“The large production equipment is the one thing that is left, but people now know the pathways they need to follow. They would acquire this electric equipment tomorrow if the incentives were there. This would accelerate equipment supply and bring capital costs down, creating a virtuous cycle of adoption.”

He can reference a white paper released by EMC members Perenti and IGO, along with ABB, in May, as an example of how an all-electric mine is possible. It can also be argued that the Australian underground mining sector has caught up and, in some respects, overtaken its rivals in Canada when it comes to electrification. This includes its leading status as an off-grid renewable energy pioneer, as well as hosting the first trial of the world’s biggest underground battery-electric truck at Sunrise Dam in Western Australia’s Goldfields region.

The numbers also back this up, with the EMC starting with five mining companies and getting to 13 in the end. The EMC has also overseen more than 15 non-commercial engagement forums with OEMs and CEOs.

Graeme Stanway (left) moderating a panel session at The Electric Mine 2024, in Perth, in May

Yet, the EMC’s influence goes beyond this, according to Stanway.

Major and mid-tier Canadian gold miners – Agnico Eagle Mines and New Gold, for example – have generously provided valuable input to specific EMC teams, while a significant amount of suppliers engaged with and learnt from that core group of 13 mining companies.

“Many of the small suppliers used this experience as a product and business development opportunity,” Stanway says. “This also benefitted the mining companies that were able to realise new solutions or services in the marketplace.”

One area that Stanway reflects on as lagging his initial expectations was getting trials off the ground.

The EMC has seen over 70 equipment trials across all fleet types, supplemented by an industry first data sharing platform. This has led to accelerated equipment adoption, but Stanway still thinks there could have been more, particularly with larger production equipment.

“I underestimated how quickly trials would get off the ground,” he said. “Even after everyone’s aspirations were laid out and there was a broad understanding of the technology at hand and the opportunities to be had with these, the momentum slowed in terms of moving to trial and adoption stages.”

He also laments that the initial push to accelerate progress towards the fully electrified zero CO2 and zero particulates mine did not result in an overarching commitment to fully remove diesel particulate matter (DPM) from the underground mining sector.

At The Electric Mine 2024 in May, Chris Carr, Acting COO of IGO, said stricter standards for airborne DPM emissions in Australia and elsewhere would “push electrification a lot harder”.

MasterMined Innovation CEO, Tony Sprague, added to this, telling The Electric Mine 2024 that DPM, and specifically nano-DPM, was “the elephant in the room” and the “real driver of getting diesel out of the underground mine and to achieve the electric mine”. He explained: “There is a new [emission] target that is coming from Safe Work Australia that is not far away. When it’s going to land we’re not too sure, but if it does land it’s going to be very problematic for the industry.”

Stanway said some of this reticence could be tied to the “portfolio mentality” of some of the larger mining companies with legacy assets, and a lack of acknowledgement from leaders on the health and safety risks that come with going underground at existing operations.

“The one thing that hasn’t happened with electrification is the wholesale change in leadership intent to shift as fast as possible,” Stanway says. “A lot of these targets, particularly production equipment conversion, are set to beyond 2030 which is outside of the purview of what gets the attention of the current crop of CEOs.

“I think it is the leadership intent that is needed as much as the technology development in this space. Once the leadership intent ‘flips’, the momentum will step up another gear.”

Progress towards the fully electrified zero CO2 and zero particulates mine has still been vast, he acknowledged, saying that the investment climate and mentality has shifted to help fund new technology adoption.

“People are now open to spending more money in areas that come with uncertain outcomes,” he says, referencing investments in artificial intelligence (AI). “In that regard, it’s not just the quantum of money that has increased, it’s also the willingness to spend money in areas that they wouldn’t have before.”

This shift will benefit other complementary areas of mine electrification and decarbonisation – such as automation, AI and energy sourcing.

Yet, there is no obvious next consortium opportunity on the horizon, according to Stanway.

“Electrification was that rare beast in that it was decarbonisation driven so wasn’t competitive at the time we started,” he said. “These types of opportunities only come around once in a while. In that regard, I’m glad we were able to make such an impact in a short space of time, and we’re able to hand the baton onto the consortium members and the broader industry to advance these areas further.”

Electric Mine Consortium launches Surface Long Haul EV Challenge

The Electric Mine Consortium (EMC) – made up of Evolution Mining, South32, Newcrest and a total of 21 major industry players – has launched a Surface Long Haul EV Challenge, calling on the automotive and electric vehicle (EV) industry for solutions in its mission to establish decarbonised mine sites.

The EMC’s call out to companies in the tech, renewable and manufacturing industries is looking for ground-breaking solutions to long haul EV trucks and associated charging infrastructure for mine sites and global supply chains.

Driven by collective demand for electric equipment across the EMC’s operating sites, spread over six continents, the consortium is looking to form synergies between mining and non-mining industries to accelerate decarbonisation solutions across the industry – the mining industry currently contributes 8% of the globe’s emissions.

EMC Founder and Director, Graeme Stanway, explains there’s currently no equipment and associated infrastructure solution that’s available at scale, in line with mining companies’ operational needs.

“The mining industry’s path to electrification is where the car industry was 10 years ago,” Stanway said. “We have the technology, but it needs acceleration and adaptation to meet the needs of varied mine sites across the world.”

He says there’s a big opportunity to recreate mining from a place of siloed communication between companies to a point where collective strategy drives the industry to drastically reduce and ultimately eliminate carbon emissions, through electrification.

“We have the world’s largest data platform of shared knowledge surrounding renewables in mining,” Stanway said. “Through the Surface Long Haul EV Challenge, we’ll be working to accelerate, pilot and convert all new fleets to electric with detailed use case studies for knowledge sharing across the industry.

“If we can solve this for our freight in mining, imagine the impact we can have on the rest of the transport market. Mining has a great opportunity to flip the perception…from being seen on the wrong end of the ledger, to being a leader.”

The EMC is now seeking businesses who can design or supply electric long-haul equipment solutions.

Electric Mine Consortium partners with AWS on world-first mine decarbonisation platform

Australia’s Electric Mine Consortium (EMC), made up of some of the world’s leading mining and service companies, has announced it is working with Amazon Web Services (AWS), an Amazon.com company, to accelerate the electrification of mine sites globally.

Announced at AWS Summit 2022, EMC is using AWS’s depth and breadth of services, including machine learning, business intelligence and storage, to build the world’s first mining data platform, to capture real-time information on mine decarbonisation from sites globally.

To drive decarbonisation, mining companies can use the platform to measure energy storage levels and electrical infrastructure use from global mine sites to accelerate the creation of a cleaner, more electrified future in mining, EMC said.

Co-founder of the EMC, Graeme Stanway, says the platform can help enable EMC members to share sustainability insights and analyse the outcomes of adopting electrified mining infrastructure and sustainable operations.

“The way we generate, store and harness energy around the globe is changing drastically,” Stanway said. “EMC’s collaboration with AWS will help see us at the forefront of this change, driving the mining industry’s electrification at scale.”

Stanway said the industry is crying out for tools to decarbonise due to tightening government emission reduction targets, increasing environmental, social and governance pressure, and the industry being responsible for 7% of the greenhouse gas emissions globally.

“Like the electric vehicle industry, electric mines are the future” Stanway said. “Not only can they be safer through the eradication of diesel particulates, pollution, noise and vibrations, they can also be more targeted, precise and effective when it comes to mining, and yield stronger results than traditional mines with minimal ground disturbance.”

As part of the initiative, EMC created a “data lake” using Amazon Simple Storage Service (Amazon S3), a cloud object storage service, that can securely store thousands of datasets from the consortium’s mines, including data on energy consumption and renewable energy infrastructure output.

EMC can then clean the data and run data pipelines using AWS Step Functions, a low-code, visual workflow service; AWS Glue, a serverless data integration service; and AWS Lambda, a serverless, event-driven compute service. AWS Glue can provide EMC with data catalogue functionality, and AWS Lake Formation, a service that makes it easy to set up a secure data lake in days, can deliver security and access control.

Amazon QuickSight, a business intelligence service (screenshot pictured), can allow everyone in the consortium to explore and understand mining data through user-friendly interactive dashboards that identify efficiency practices that may reduce emissions, according to EMC.

Also, using Amazon SageMaker, a fully managed service to build, train, and deploy machine learning models, EMC can train machine-learning models to predict energy usage spikes at mines and track the carbon efficiency of deploying sustainable energy infrastructure.

Sarah Bassett, Head of Mining and Energy, Australia at AWS, said: “Data capture and analysis is essential to mining operations, and AWS is helping consortium members to share their critical datasets and collective insights to drive the digitisation and evolution of the industry. I am excited to be collaborating with the EMC and its consortium members to improve the design of mines globally and accelerate the industry’s journey to decarbonisation on the global scale.”

The EMC is a growing group of over 20 mining and service companies. These companies are driven by the imperative to produce zero-emission products for their customers and meet mounting investor expectations. Thus, the objective of the EMC is to accelerate progress toward the zero-carbon and zero-particulate mine through:

  • Resolving key technology choices;
  • Shaping the supplier ecosystem;
  • Influencing policy; and
  • Communicating the business case

The EMC is emerging as a key vehicle for the decarbonisation of the mining industry, particularly for underground operations, and will remain responsive to the rapidly changing external environment.

Members include OZ Minerals, Newcrest Mining, Gold Fields, IGO, South32, Blackstone Minerals, Evolution Mining, Barminco and Iluka Resources.

Mine electrification shift could create new business opportunities, report says

Heightened social pressure and a need for economically efficient mining practices will see Australia’s mining industry shift towards a future of automation, electrification and the ultimate goal of zero emissions on site, according to the State of Play: Electrification report.

The report states the majority (89%) of the globe’s leading mining executives expect mine sites across the world to electrify within the next 20 years.

Electrification is a game changer for the mining industry as it allows the complete removal of diesel from mines and, when combined with renewable energy, results in a decarbonised mine site.

Australia’s leading mining companies such as Rio Tinto, BHP, South 32 and OZ Minerals – along with Tesla – provided input into the report, which uncovered that the need to shift to low footprint, electric mines is being driven by economic, environmental and health related opportunities.

More specifically, nearly 79% of mining executives believe there will be a health-related industry class action in the next 15 years and 91% expect the shift to electrics will create new business opportunities.

It’s these perceived health risks – if nothing changes – and economic benefits that State of Play Co-Founder and Chairman, Graeme Stanway, says is driving the industry to take a close look at current practices and think: how can we do this better?

“Electric equipment will allow for a shift from the typical underground mine sites we see today in Australia with many pieces of heavy equipment, powered by diesel, operating underground in confined spaces alongside teams of people, towards a clean future of mining, not seen before,” he said.

“A future where machinery is safe, automated and battery powered; this would effectively cut out two of the biggest issues in mining: carbon impact and particulate exposure and result in zero carbon emission mines.”

While the industry as a whole understands these benefits, when it comes to individually implementing them as an organisation, cost becomes a key hurdle, according to Stanway.

“Our data shows renewables, all electric systems and batteries will help fuel the change towards a healthier, economically viable future of mining, but uncertainty remains when it comes to to which area to invest in first, and how,” Stanway says.

He says the industry should focus on collaborating to overcome cost barriers and uncertainty in technology choices that may be beyond the capacity of individual companies. And, while the mass adoption of electrification technology has so far been low, key players such as Independence Group, Gold Fields, South32, OZ Minerals and Barminco are joining forces to accelerate achieving the goal of zero emissions mines.

METS Ignited CEO, Adrian Beer, is part of this collaboration and says Australian mining companies have a huge advantage compared with their global counterparts when it comes to alternative energy sources.

“Here, in Australia, we have an abundance of renewables that the industry is tapping into, particularly in our most remote operations,” he said. “Local mine sites have the opportunity to install solar and wind, and battery energy storage systems to power their operations at a much cheaper cost than many global players.”

He added: “For the country to fully realise the opportunity of zero emissions mines, we also need to be able to effectively implement these technologies. We need to modernise our regulatory framework, and consider what skills our sector will need, across the entire range of the workforce, from trades and technicians, university graduates, through to our scientists and PhDs.”

Miners not taking cybersecurity risks seriously, report finds

While cybersecurity is today considered a major threat to all industrial companies, a recent report out of Australia has concluded it will take a catastrophic event for it to be taken seriously in the mining industry.

Through interviews, survey and analysis of Australia’s largest mining and service companies, including BHP, Rio Tinto, South32, and Anglo American, the ‘State of Play: Cyber Security Report’, from researchers at State of Play, has uncovered that 98% of top-level executives think a catastrophic event is required to drive an industry response to cybersecurity in mining.

This is despite State of Play Chairman and Co-founder, Graeme Stanway, saying the risk of cybersecurity failures in mining could be severe.

“In an increasingly automated and interconnected world, the risk of rogue systems and equipment is growing rapidly,” he says.

“If someone hacks into a mining system, they can potentially take remote control of operational equipment. That’s the level of risk that we are facing.”

Global Head of Cybersecurity at BHP, Thomas Leen, agreed and said the mining industry is up against archaic processes when it comes to evolving on the cybersecurity front.

“Mining as an industry has a low level of cybersecurity maturity, mainly due to legacy environments that lack basic capabilities,” he says.

The report went on to find that the second most likely driver to instigate change, after a catastrophic event, will be government led initiatives and responses.

Michelle Price, CEO of independent, not-for-profit organisation, AustCyber, believes public-private partnership is the key to driving change in the way the mining industry approaches cybersecurity.

“AustCyber has collaborated with METS Ignited and State of Play to conduct this survey as we see the potential to improve cybersecurity across the mining environment,” she says.

“There are several challenges specific to the mining sector as documented in the Australian Cyber Security Industry Roadmap, developed in conjunction with CSIRO – such as operational technology, connected equipment and sensors, availability of data, anomaly detection and the volatility of markets.

“There are plenty of growth opportunities – especially when the sector collaborates with organisations like AustCyber to have a coordinated voice on the kind of support it needs to push forward cyber resilience.”

South32 Head of Cybersecurity, Clayton Brazil, sees this collaboration as a strength of cybersecurity in the mining industry. “Cybersecurity is incredibly collaborative in mining, we know it’s a critical industry for our nation and we all want to be safer,” he says.

Brazil sees a strong cybersecurity capability as a strategic opportunity for South32. “Done properly, cybersecurity can be a competitive advantage for us,” he said.

Interestingly, when asked what is the most likely motivation for cyber attacks, 50% of responses identified extortion and theft as the most likely cause, followed by competition with 21% and politics with 19%.

METS Ignited CEO, Adrian Beer, says industry growth and sustainability will come from collaboration and the implementation of standards. “Mining operations are still made up of legacy closed systems that have customised integrations between them,” he says.

“However, the modern technology vendor community is trying to overcome these systems with new models; building collaboration and trust between mining and the technology sector will create a secure sustainable future.”

Beer also believes standards have a two-prong role to play. “There is clearly a need for both a strong set of standards to define what good looks like in terms of cybersecurity more broadly, and a set of industry standards to ensure that the specific needs are met to deliver those secure outcomes.”