Tag Archives: LNG

BHP weighs trolley assist and IPCC as part of decarbonisation efforts

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BHP has provided an update on its progress on climate action, new climate commitments and how it integrates climate change into corporate strategy and portfolio decisions in a new report.

The company’s climate change approach focuses on reducing operational greenhouse gas emissions, investing in low emissions technologies, promoting product stewardship, managing climate-related risk and opportunity, and partnering with others to enhance the global policy and market response, it says.

“BHP supports the aim of the Paris Agreement to limit global warming to well below 2°C above pre-industrial levels, and pursue efforts to limit warming to 1.5°C,” the company clarified.

It explained: “BHP has been active in addressing climate risks for more than two decades, and has already established its long-term goal of achieving net zero operational (Scope 1 and 2) emissions by 2050 and its short-term target of maintaining operational emissions at or below financial year (FY) 2017 levels by FY2022, using carbon offsets as required.”

In the past year, BHP has made progress on this aim, announcing that the Escondida and Spence copper mines in Chile will move to 100% renewable energy by the mid-2020s, and, last week, awarding new renewable energy contracts for its Queensland coal assets, and the world’s first LNG-fuelled Newcastlemax bulk carrier tender.

BHP’s climate change briefing and 2020 climate change report outline how the company will accelerate its own actions and help others to do the same, it said. Today’s update sets out:

  • A medium-term target to reduce operational greenhouse gas emissions by at least 30% from adjusted FY2020 levels by FY2030;
  • Scope 3 actions to contribute to decarbonisation in its value chain. This includes supporting the steelmaking industry to develop technologies and pathways capable of 30% emissions intensity reduction with widespread adoption expected post-2030 and, in terms of transportation, supporting emissions intensity reduction of 40% in BHP-chartered shipping of products;
  • Strengthened linking of executive remuneration to delivery of BHP’s climate plan; and
  • Insight into the performance of BHP’s portfolio in a transition to a 1.5°C scenario.

The report also outlined some examples of emission reduction projects the miner is considering, which will be weighed as part of the maintenance capital category of its capital allocation framework. This includes solar power installations; alternative material movement technologies such as overland conveyors and in-pit crush and convey solutions; and trolley assist to displace diesel for haul trucks.

The company expanded on this in its report: “The path to electrification of mining equipment will likely include solutions such as trolley assist, in-pit crush and convey, overland conveyors and battery solutions.

“Diesel displacement represents a higher risk, higher capital step towards decarbonisation, so a phased approach to execution is proposed with particular emphasis on Minerals Americas-operated assets that are further advanced on the decarbonisation journey. Taking a transitional approach to electrification provides flexibility to allow for the potential for rapid development of emerging technologies and to resolve the complexities of integrating these technologies into existing operations.

“During FY2021, we will seek to collaborate further with International Council on Mining and Metals members, industry and original equipment manufacturers to progress research and development to reduce costs and assess any potential impacts from electrified mining equipment solutions to replace current diesel options.”

BHP Chief Executive Officer, Mike Henry, said of the report: “I’m pleased today to show how we are accelerating our own actions and helping others to do the same in addressing climate change. We see ourselves as accountable to take action. We recognise that our investors, our people and the communities and nations who host our operations or buy our products have increasing expectations of us – and are responsive to these.

“Our approach to climate change is defined by a number of key requirements. Our actions must be of substance. They must be real, tangible actions to drive emissions down. We must focus on what we can control inside our business, and work with others to help them reduce emissions from the things that they control. To create long-term value and returns over generations, we must continue to generate value and returns within the strong portfolio we have today, while shaping our portfolio over time to benefit from the megatrends playing out in the world including decarbonisation and electrification.

“Our portfolio is well positioned to support the transition to a lower carbon world aligned with the Paris Agreement. Our commodities are essential for global economic growth and the world’s ability to transition to and thrive in a low carbon future. Climate change action makes good economic sense for BHP and enables us to create further value.”

Cat continues to see LNG interest for large mining trucks

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Caterpillar’s focus on minimising the environmental impact its large mining trucks have on operations has seen it pursue many new and old technologies of late, one of which is the use of alternative fuels.

In a recent Viewpoint post, David Rea, General Manager for Cat Large Mining Trucks, said the company is looking throughout its supply chain to reduce the emissions associated with using and building its vehicles.

“We’re meeting the most stringent emissions regulations,” he said. “We’re offering trucks that can run on alternative fuels, and others that can be electrified using our trolley conversion kit. We’re also making sure we get the most out of parts and components so we’re reducing waste and energy usage.”

On top of this, the company is pursuing Project Verde, a project “focused on energy and emissions reduction, and helping customers decrease their carbon footprints through machinery and power solutions that contribute to lower greenhouse gas”, Brian Weller, Chief Engineer, Surface Mining & Technology, Caterpillar Inc, told IM earlier this year.

In the meantime, Cat said it continued to see interest around the world for alternative fuels and was researching various solutions both in the lab and field in response to this.

One solution, liquefied natural gas (LNG), is a clean-burning fuel that can be sourced locally and is produced more naturally than diesel. It has been discussed as a diesel fuel alternative in the industry for more than a decade, but it is yet to find widespread industry appeal.

Nic Tegtmeyer, Senior Product Specialist at Cat, says the company’s Dynamic Gas Blending (DGB) conversion kits for mining trucks are a dual-fuel technology that enables miners to substitute diesel fuel with LNG.

“Not only has LNG been proven to reduce emissions by up to 30%, it also costs about 30% less than diesel,” he said. “Physical ability remains over 90% and DGB has no impact on unplanned downtime.”

DGB vaporises liquid fuel into natural gas, then replaces diesel fuel with LNG when possible. On average, DGB replaces about 60-65% of diesel with LNG, according to Cat.

One place where this technology is being utilised is Fresnillo’s Penmont division in Mexico, where Cat and its Mexico-based dealer, Matco Cat, has converted the entire fleet of large mining trucks at the La Herradura open-pit mine, in Sonora.

Tegtmeyer says DGB is relatively new in mining, but it has over 10 million operating hours of proven data to its name.

“Testing and customer trials have resulted in zero recordings of unplanned downtime related to DGB,” he added.

DGB kits are currently available for Cat 785C and 793D trucks, but this offering could expand beyond that, according to Tegtmeyer.

“We’re listening to our customers and gauging interest in offering the kits for additional truck models,” he said. “Not every mine is an ideal candidate for this solution, but if a natural gas supply is nearby, it can provide significant savings.”

This article is an edited version of this story here.

Australia establishes new CRCs to tackle ‘future energy’ and mining economies

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The Australian Government has confirmed it will provide A$40 million ($25 million) for the establishment of the Future Energy Exports (FEnEx) CRC and A$29.5 million for the CRC for Transformations in Mining Economies (CRC TiME).

Minister for Industry, Science and Technology, Karen Andrews (pictured), and Minister for Resources, Northern Australia and Water, Keith Pitt, delivered the news this week.

Since 2013, the Australian Government has committed A$1.1 billion to support the establishment of 30 cooperative research councils, with industry and research partners contributing A$3.4 billion in cash and in-kind contributions, it said. Among a number of active CRCs are the MinEx CRC, aimed at lifting Australia’s mineral discovery rate, and CRC ORE, focused on optimising resource extraction.

Andrews said the FEnEx CRC would help Australia maintain its position as a leading global energy exporter. The bid has been substantially supported by the WA State Government, global energy giant Chevron, Hydrogen leader ITM Power and mining innovator Mineral Resources with research partners UWA, Curtin University, Queensland University of Technology, University of South Australia and Swinburne University, the FEnEx CRC said.

“The world’s demand for energy is insatiable and Australia is already dominant, with current energy exports worth nearly A$90 billion,” she said. “The FEnEx CRC will further strengthen our export industry by developing technologies to improve the efficiency of existing LNG processes and the development of new exports like hydrogen.

“Importantly, the FEnEx CRC will tap into international interest in lowering the cost of energy production, while at the same time reducing the carbon footprint of the LNG industry.

“This CRC’s research program promises to place Australia’s LNG sector well ahead of the curve by anticipating future changes in our energy mix, improving the competitiveness, productivity and sustainability of Australian industries.”

Minister Andrews said the CRC TiME, which has a national consortium led by The University of Queensland and University of Western Australia behind it, meanwhile, would help keep jobs in regional communities, building on the strength of the resources and energy sectors.

“Australia’s world-class mining expertise is undeniable, but being a global resources powerhouse means ensuring a sustainable future for our mining towns in rural and regional Australia,” she said.

Minister Pitt added: “The resources and energy sector is building new infrastructure across regional Australia and developing highly skilled and highly committed local workforces. This new CRC will provide the tools for towns and regions to navigate opportunities to create new jobs and development that keep communities strong.

“The government and the resources industry recognise more needs to be done to diversify the economy of some local communities, which are highly dependent on individual mining projects. The work of CRC TiME will help mining communities broaden their local economies so they can continue to grow and stay strong.”

The FEnEx CRC has generated a further A$122 million in cash and in-kind contributions from industry and researchers, while the CRC TiME has generated a further A$105 million in cash and in-kind contributions from industry and researchers.

Strandline, Woodside and EDL to work on ‘world-first’ power project for Coburn

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Strandline Resources has selected Woodside and EDL to provide a fully integrated energy solution for its Coburn mineral sands project, in Western Australia.

The parties have signed a non-binding proposal for the development of a 27 MW integrated trucked LNG, storage and power station facility, comprising gas and diesel back-up generators combined with state-of-the-art solar and battery technology, it said.

The Woodside and EDL joint venture (WEJV) was formed to provide clean, reliable and affordable LNG to market, according to Strandline.

“This world-first trucked LNG to hybrid renewable microgrid project will see EDL bring its turnkey expertise to the project’s power station and LNG storage and re-gasification facilities, with LNG supplied from Woodside’s Pluto LNG truck loading facility near Karratha, Western Australia,” Strandline said.

It is expected that contract documentation, in the form of a 15-year power purchase agreement, will be finalised over the coming months in readiness for the commencement of construction, Strandline said.

The WEJV solution provides Strandline with a long-term safe, reliable and highly efficient energy solution for Coburn, according to the developer.

EDL was recently involved in the start up of phase one of a hybrid power project at Gold Fields’ Agnew gold mine, also in Western Australia (pictured).

Coburn, meanwhile, is a mineral sands deposit hosting “exceptional” zircon and titanium mineral sands products, Strandline says. The project benefits from being situated in the well-established mining jurisdiction of Western Australia, close to key road, port and services infrastructure.

The company recently completed a definitive feasibility study on Coburn, which showed the project could generate a pre-tax net present value of A$551 million ($377 million) using a US$:A$ of 0.72, an 8% discount rate, and development capital of A$207 million for the heavy mineral concentrate produce case, with an additional A$50 million required for the final products case (including mineral separation plant infrastructure).

BHP looks to LNG for lower iron ore shipping emissions

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BHP, as part of its goal to reduce greenhouse gas emissions across its operations, has released the world’s first bulk carrier tender for LNG-fuelled transport for up to 27 Mt of its iron ore.

The company said: “Introducing LNG-fuelled ships into BHP’s maritime supply chain will eliminate nitrogen oxide (NOx) and sulphur oxide (SOx) emissions and significantly reduce CO2 emissions along the busiest bulk transport route globally.”

BHP, as part of its greenhouse gas emission reduction plans, recently signed a memorandum of understanding with Mitsubishi Development to work together in the pursuit of emissions reductions, including from the life-cycle use of marketed products.

Rashpal Bhatti, Vice President, Maritime and Supply Chain Excellence, BHP, said emissions resulting from the transportation and distribution of the company’s products represented a material source of its value chain emissions (Scope 3).

“We recognise we have a stewardship role, working with our customers, suppliers and others to influence emissions reductions across the full life cycle of our products,” Bhatti said. “Through this tender, we are seeking potential partners who share our ambition of lowering emissions to the maritime supply chain.”

The tender is open to a select group of industry leaders, from ship owners, banks and LNG fuel network providers, BHP said. “As well as LNG-fuelled transport for up to 10% of its iron ore, the tender seeks other innovative solutions that can lower greenhouse gas emissions and increase productivity from BHP’s freight requirements.”

Bhatti added: “We are fully supportive of the International Maritime Organisation’s (IMO) decision to impose lower limits on sulphur levels in marine fuels.

“While LNG may not be the sustainable homogenous fuel of choice for a zero carbon future, we are not prepared to wait for a 100% compliant solution if we know that, together with our partners, we can make significant progress now.

“This new tender adds to the work BHP is doing with customers, suppliers and parties along our value chain to influence emissions reductions from the transport and use of our products.”

The IMO ruled from January 1, 2020, that the marine sector will have to reduce sulphur emissions by over 80% by switching to lower sulphur fuels, with the current maximum fuel oil sulphur limit of 3.5 weight percent (wt%) falling to 0.5 wt%.

As well as investments in emerging technologies, BHP sets greenhouse gas emissions reduction targets for its operations, builds the resilience of its operations and communities to the physical impacts of climate change, and works across sectors to strengthen the global policy and market response, the company said.

Adaman’s Kirklalocka gold project to be powered by LNG

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Adaman Resources’ owned Kirkalocka gold project, in Western Australia, is set to be powered by LNG after the asset owner and EVOL LNG signed a agreement.

The long-term arrangement, between EVOL and Adaman Resources’ wholly-owned subsidiary Kirkalocka Gold SPV Pty Ltd, will see EVOL LNG fuel Zenith Energy’s 14.5 MW power station, with supply planned to commence from September 2019.

The gold mine, around 70 km south of Mt Magnet in the mid-west region of Western Australia, is set to restart operation after more than a decade, with the mine’s new owners refurbishing the processing plant and increasing its capacity to over 2.2 Mt/y.

EVOL LNG and Wholesale Manager, Nick Rea, said the use of LNG as an alternative to diesel will help minimise the mine’s carbon emissions.

“LNG produces 25% less CO2 emissions than diesel, and during the initial six years of operation, the mine will avoid 50,000 t of greenhouse gas emissions by fuelling its power station with LNG instead of diesel. This is the equivalent of keeping around 3,000 cars off the road,” Rea said.

EVOL, part of Wesfarmers Chemicals, Energy & Fertilisers, will build, own, operate and maintain the on-site LNG storage and vaporisation facility at the mine, it said. “The facility will use EVOL LNG’s modular design which allows for fast installation and expandability to suit the mine’s growing energy requirements,” the company added.

Adaman Resources’ Chief Executive Officer, Craig Bradshaw, said EVOL LNG will provide environmental, financial and economic benefits for the company.

“Utilising LNG as an alternative to diesel-fired generation will significantly reduce our energy costs and exposure to volatile diesel prices. Based on the current diesel price, we estimate our energy costs to be reduced by more than A$13 million ($9 million) during the first six years of operation,” he said.

EVOL’s Rea said Kirkalocka was the company’s third major contract in the mid-west in recent years; he sees huge potential for growth in this region.

“The scarcity of gas pipelines and absence of grid power would otherwise force off-grid mines to use diesel for power generation, but we are able to provide a much better solution with LNG. It’s clean, safe, reliable and lower cost than diesel.

“We have proven ourselves to the mining industry over the last decade, with seven mine sites now powered by EVOL LNG,” he said.

Cat’s DGB dual-fuel technology cuts costs, emissions at La Herradura gold mine

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Caterpillar has been showing one of Mexico’s biggest gold mining operations that its Dynamic Gas Blending™ (DGB) technology can provide savings on fuel costs and emissions while maintaining the same performance, payload and productivity of its diesel haul trucks.

The mining OEM and its Mexico-based dealer, Matco Cat, have been working with Fresnillo’s Penmont division to convert its entire fleet of large mining trucks at the La Herradura open-pit mine, in Sonora.

Caterpillar’s dual-fuel DGB technology, which has accumulated 10 million hours in the oil and gas industry since 2013, works by blending lower cost liquefied natural gas (LNG) with diesel fuel, according to Cat.

The resultant improvements in fuel, emissions and maintenance can add up to millions of dollars each year in cost savings, Cat said.

La Herradura, since 2016, has acted as a great case study for the technology given it has more than 250 Cat trucks and the operation hauls at least 25 Mt of volume per quarter (based on Fresnillo’s most recent Q4 production results).

In addition, the company has been looking for ways to “produce (gold) in a sustainable manner”, Fresnillo’s Abel Villa said in a recent Cat customer story.

According to Steve Igoe, Commercial Manager for Caterpillar’s Gas Engine Business, the benefits of DGB technology include, primarily, a lower cost per tonne, realised through a lower fuel cost. “DGB truck operation with LNG has proven very beneficial to La Herradura, and this is why they have decided to convert their entire fleet,” he said.

“Typically, LNG is 30% lower than the price of diesel. And, on a typical fleet at a mine, that adds up to millions of dollars a year,” he said. “And the trucks maintain the ability to operate 100% on diesel.”

Cat estimates a fleet of 100 trucks spends approximately $60-70 million/y on diesel fuel. With 65% displacement to LNG using DGB, that fleet could save $13 million/y on fuel alone.

DGB can also bring about a 30% cut in emissions compared with diesel-only operation – another important saving for mining companies looking at sustainability.

Trials during 2016 and 2017 of the technology at a gold mine in Turkey and a phosphate mine in the US have proven these claims.

For instance, the Turkey gold mine has retrofitted DGB technology on Cat 150-ton (136-t) 785C haul trucks and, since installation, has reached an average 70% average fuel displacement in addition to an operating cost reduction of $30/h.

Fresnillo’s Villa said La Herradura had gone further than this in terms of displacement.

“Initially when we started the project, the substitution rate was 70:30. We evaluated the results and changed the substitution to 85:15,” he said. This is close to the peak substitution rate Cat typically recommends.

Villa continued: “We have an average reduction of 70% in diesel consumption. We also considerably reduced the amount of emissions. When we compare both diesel and gas, the operation is the same.”

Cat said it observed a less than 1% difference in speed, payload and gear shifting, plus a 30% reduction in fuel cost, during one customer’s 5,000-h DGB trial.

La Herradura has also seen no unexpected maintenance issues during the trials, according to Fresnillo’s Enrique Leal. This is in keeping with Cat’s focus on reliability and productivity, with the company saying it has tallied zero hours of unplanned downtime.

So far, La Herradura has retrofitted 31 of its 785C haul trucks and a significant number of 240-ton (218-t) 793D trucks with the DGB technology.

Fresnillo’s Villa said the operation also plans to partner with a third party to build an LNG plant near the mine to ensure a sustainable supply.

MES off to fast start with dual fuel haul truck engine conversion tech

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Mine Energy Solutions (MES) is building on the recent dual fuel hybrid truck trial it ran with project partners New Hope Group and Hastings Deering at the New Acland coal mine in Queensland, Australia, and hopes to roll out its first commercial fleet at an operation in the state’s Bowen Basin late next year.

The trial on a Cat 789C haul truck took place over the past two years at New Acland and involved the conversion of high horse powered diesel engines from 100% diesel to dual fuel operation, using natural gas as the dominant fuel through sequential gas injection.

MES’ Graham Box provided IM with some more insight into the High Density Compressed Natural Gas (HDCNG®) technology, owned and developed by MES shareholder Intelligas, and the company’s business model.

Mr Box said MES, which doesn’t sell a product or a kit but a “fully-funded energy proposition”, uses bespoke designs for each truck model conversion it works on.

The incorporation of Type 4 carbon fibre cylinders to store the gas – which is compressed and stored at 350 bar (5,000 psi) using patented technology – is one of the ways the company has got around the weight and space constraints that previously limited technology using compressed natural gas and LNG on truck engines.

A lightweight non-invasive engine augmentation and on-board control system also help alleviate this issue, according to Mr Box.

“Remember, our gas remains in a gaseous state and is not liquefied,” he added.

The haul truck fuel conversion packs use HDCNG® proprietary gas cylinder filling technology to achieve energy densities approximately double that of conventional compressed natural gas storage systems and approaching two thirds of the density of LNG without the operational complexity and cost of LNG cryogenic storage and handling, according to MES.

“This enables mine trucks to achieve high levels of diesel displacement whilst carrying sufficient fuel on board for a full work shift and not adversely affecting payload,” the company said.

The system has been developed to achieve sufficient fuel storage quantities on board the machine for a full work shift of up to 12 hours. In mine haul trucks, a slim-line diesel fuel tank (and if required a slim-line hydraulic oil tank) replaces the existing tanks allowing for the introduction of HDCNG® fuel packs for the storage of gas on the machine.

The trial at New Acland took place on a Cat 3516B engine, yet Mr Box said the company is “well advanced” or has “completed development work” on a number of other OEMs and models.

“Our first commercial conversions will be on either a Liebherr or Komatsu mine haul truck,” he said. “We are targeting large trucks/engines, with the 789C, or equivalent, the smallest we will do.”

In addition to preparing for its first commercial fleet agreement late next year, Mr Box said deliveries are expected in the US and Western Australia’s Pilbara region in the following two years.

This is just for starters, with qualified opportunities in Canada, South America, India, Russia, South Africa, Ghana, Tanzania, Indonesia and Mexico, according to Mr Box.

“The best testament for us is feedback from mining companies who have been searching for the type of technology we have developed,” he said.

“We have been told by some of the world’s largest miners that there is clear daylight between our technology and anything else out there, including from the OEMs. It has been MES’ choice to position our commercial pathway in a targeted and controlled fashion and we are working closely and collaboratively with our pathfinder customers and these other mining companies.”

Newmont Mining still weighing up LNG/diesel dual-fuel options

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The use of LNG in the engines of mining haul trucks has been gaining serious traction of late with OEMs and mining companies, alike, considering dual-fuel options.

Newmont Mining stated in its 2017 sustainability report, released back in April, that it and Caterpillar were looking at such a project as part of the US-based mining company’s attempt to decrease its greenhouse gas (GHG) emissions.

The company believes the advancement of dual-fuel engines on haul trucks could displace, on average, 65% of diesel fuel with LNG.

A Newmont spokesman told IM this week that the company is still in the process of evaluating an LNG option and, at some point, it may “take the next step towards a meaningful pilot project”.

Teck Resources carried out such a trial at its Fording River coal operations in British Columbia, Canada.

The pilot test, which used a hybrid LNG/diesel fuel system in six haul trucks and concluded in December 2016, provided many valuable learnings to Teck, including “utilising LNG safely and integrating new technologies at our operations”, Greg Brouwer, General Manager, Technology and Innovation, recently told IM.

“While the particular LNG technology used in this pilot did not achieve the targeted emission reduction benefits, we remain committed to exploring the use of LNG as a haul truck fuel source to reduce GHG emissions and costs and we are currently assessing other technologies,” he said. (You can read more about Teck’s latest innovations in the upcoming IM October issue)

Just last month, GFS Corp reported increased interest in its EVO-MT® System for off-highway machinery. Much of this renewed interest is coming from the mining sector where the company’s products allow haul trucks, wheel loaders and drill rigs to operate on a combination of diesel and LNG or NG+D® as the company refers to it, GFS said.