Tag Archives: State of Play

State of Play report highlights expected solar dominance in future mine power mix

The State of Play’s latest industry report has highlighted the increasing prevalence of solar use across the Australian mining landscape, with global mining leaders predicting that solar will be the main energy source in just 15 years as the sector shifts to renewables.

The report, The State of Play: Mining Strategy in a Changing World, received input from over 700 global mining leaders, from major mining groups such as Rio Tinto, BHP and South 32. It uncovered mining leaders predicting oil and diesel will only contribute around 20% of the future energy source for the industry, with 79% indicating solar will be the main energy source over the next 15 years.

The predicted shift comes as pressure mounts for the mining sector to do more in the space of renewables with the majority of mining leaders (91%) believing they are viewed negatively by society as a whole with respect to climate, the report states.

State of Play Chair, Graeme Stanway, says the energy transition, alongside a government push to capitalise on green critical minerals, provides a viable pathway for industry to take action and catalyse industry-wide transition.

“Our data shows that both the energy transition and environmental pressures are in the top three global trends that are expected to have the biggest impact on innovation and change in the mining over the next 15 years,” he said. “Society is expecting the mining industry to step up, and as a consequence we are seeing innovations in processing, new energy sources and technologies. Technology like long duration energy storage has come a long way in the last few years, as has the use of artificial intelligence.”

Companies such as Bellevue Gold (solar operation pictured above) are in the process of developing assets with over 80% renewable penetration, while others, such as Gold Fields, have trialled numerous electric vehicles.

Other insights from the report include:

  • 56% of all respondents stating geopolitical alliances will have the biggest impact on global supply chains in the mining industry;
  • 81% of respondents believe battery minerals will offer the most attractive investment returns over the next 15 years;
  • Nearly 70% of CEOs suggested their timeframe for innovation focus was less than three years; and
  • 67% of respondents stated they believed there would be a carbon-based price differential for their commodities in the next five years.

State of Play mine electrification report sheds light on benefits, hurdles and risks

More than half of mining industry executives say they would electrify their mine sites for cost reasons, according to the latest State of Play report on electrification.

With the mining industry rapidly adopting new technologies to decarbonise their operations, the Australia-based State of Play platform has, again, sought to gather industry perspectives on the reasons companies are pursuing their shift away from fossil fuels.

The latest report follows the inaugural State of Play: Electrification report, released in 2020. This report, in part, led to the formation of the Electric Mine Consortium, a collaboration between mining and service companies aiming to accelerate progress towards the fully electrified zero CO2 and zero particulates mine.

The findings from the latest report – which took into account 450-plus individual surveys, five industry webinars and workshops and five interviews with “thought leaders” – have reinforced that mine electrification is a foundation enabler for the clean energy transformation of mine sites.

“The mining industry sees it as one of the most pressing transformation imperatives for the industry, facilitating precision automation and the digitisation of mine operations, whilst improving environmental and health outcomes,” it said.

At the same time, the report acknowledges that mine electrification technology is currently undergoing a “maturation process” with 49% of mining CEOs referenced in the report believing it will take existing mines on average five-to-10 years to electrify.

“Much of the technology for full electrification of mine sites is available today, however a significant knowledge gap exists across industry relating to the capability of electrified mines and the strategy for implementation,” it said.

Of the industry executives surveyed for the report, 57% expect the energy transition to be ‘the’ global trend that will have the biggest impact on the industry over the next 15 years.

Close to 90% (89%) expect mine sites will electrify within the next 20 years and 61% expect the “next generation” of mines will be all-electric.

In keeping with this, 83% expect renewable energy technologies will significantly change mining operations over the next 15 years; and 98% view mine automation as ‘the’ technology to benefit the most from electrification.

The responses related to benefits expected from this transition brought up some of the most interesting insights into the mine electrification evolution, indicating there are environmental, cost and reputation risk advantages associated with electrifying operations.

For instance, of the survey respondents, just over 90% (91%) expected the shift to an electrified system to create opportunities for new business models, while just over half (53%) say they would electrify their mine sites for cost reasons. The latter indicates that the cost of operating, establishing and maintaining new electrified equipment and infrastructure is now at a point where it could not only compete, but provide an economic advantage over fossil fuel-powered operations in the long term.

Close to four-fifths of respondents (79%) expect there to be a health-related industry class action in the next 15 years – indicating the reputational risk that could come with maintaining the operational status quo.

Some 71% view processing and 68% view extraction as having the greatest leverage in decarbonising the mining value chain, the report confirmed, while 46% expect innovation in carbon emissions and 42% expect innovation in diesel replacement will have the greatest environmental benefit in their business. Close to 90% (86%) expect transparency of the source of raw materials to become a significant driver of mining company value.

In key areas of the value chain, miners are faced with distinct choices of which technology to invest in (eg what type of battery storage technology, swap versus fast charging, etc). Of the survey respondents:

  • 60% believe miners should begin transitioning to an all-electric system with installing renewables. Electrical infrastructure was second with 37%, with heavy mobile equipment third with 32%;
  • 87% expect solar will become the most widely used energy source in the industry in the next 15 years, followed by gas, wind and diesel (58%, 44% and 39%, respectively);
  • 76% expect remote mine sites will use batteries to supplement renewables, followed by diesel with 53% and demand management at 42%;
  • There is no consensus as to which energy source will power heavy mobile equipment between lithium batteries, hybrids and diesel (28%, 21% and 18% respectively); and
  • 54% expect infrastructure to be the main challenge for transitioning mine sites to electric.

Of these stats above, the lack of consensus as to which energy source will power heavy mobile equipment is as enlightening as it is expected.

Battery-electric technology has matured to the point where one would expect it to dominate in the underground space, followed closely by fuel cell power, hybrids and some form of trolley, but it is a lot harder to predict the winner in the open-pit mining space, with major miners pursuing different developments related to hydrogen, batteries, trolley assist and alternative fuels.

“The mass adoption of electrification technology and storage systems to power mine sites has so far been slow,” the report stated. “It is clear that as an industry, this knowledge gap will need to be confronted largely through testing and piloting, which allows for the development of case studies for application, economic models and best practice guidelines.”

Of survey respondents:

  • 88% see cost as being the major risk of electrifying a mine site;
  • 63% report that risk aversion is holding back the implementation of electrification technologies;
  • 18% are willing to accept increased risk in asset design to increase financial returns; and
  • 41% are primarily focusing their innovation efforts on energy.

The report authors say the industry should focus on collaborating to overcome the barriers that are beyond the capacity of any one individual company to address, with such efforts requiring the mobilisation of policy makers, miners, service companies, investors and researchers in order to achieve the scale, capital and influence to drive success.

Of survey respondents:

  • The preferred partnering approach for achieving breakthrough innovations is collaborating with selected partners (65%);
  • The majority believe the best way the government can support innovation is through regulation and collaboration (#1 and #2, respectively);
  • 85% believe broad industry standards for battery types are required.
  • 52% see miners as the biggest group driving investment in electrification followed by suppliers and investors (39% and 38%, respectively); and
  • 60% believe the industry should focus its health risk innovation on airborne particulates.

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.”