Ramping up mine site decarbonization

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Decarbonization, the reduction, removal or offsetting of CO2 emissions, has become a strategic priority for mining majors. Most are on track to meet their 2020 targets and have started looking at the 2050 horizon, in line with the Paris Agreement’s ambition to keep global warming below 2°C by 2100. In February, Rio Tinto published its first climate change report, following guidelines by the Task Force for Climate-Related Financial Disclosures (TCFD). It revealed that the company is on track to deliver its target of 24% emissions reduction by 2020. Anglo American has set 2030 targets to reduce absolute GHG emissions by 30% and is on track to achieve its 2020 targets of an 8% improvement in energy use and a 22% saving in GHG emissions. And last year, BHP set the long-term goal of achieving net-zero scope 1 and 2 emissions in the second half of this century, meaning it will no longer produce CO2 in its operations or through the power it purchases.

A myriad of other clean energy, power efficiency, and electrification projects have also recently been announced: Antofagasta and Anglo American have both signed power purchase agreements (PPAs) to power Chilean mines with 100% renewable energy; DeBeers is also looking at using 100% renewables for its Chidliak project and is testing ways to store emissions at its Gahcho Kué mine in Canada; and both Koppar Resources and Nouveau Monde Graphite are planning new zero-carbon mines — and this is all on top of the many hybrid power plants being built at mines around the world.

So what is driving this push for low-carbon mining? John O’Brien, a partner in Deloitte’s financial advisory arm, believes that there are three factors: “Government and social expectations are moving quite rapidly, which is important as a context, but not enough. Technology is getting cheaper and cheaper: in a lot of projects the company actually ends up saving money, even if the capital investment is higher. But the area that in my mind has absolutely changed everything is the TCFD disclosures,” he explains.

The TCFD recommendations came out in 2017 and, though these disclosures are not compulsory, they have been widely adopted by the investor community, and consequently, by any large company that receives money from that community. “Big listed companies,

particularly multinationals, have no choice but to address what their climate risks are, and once you’ve told people what your climate risks are, you need to be seen to be doing something about it,” says O’Brien.

Not only are climate risks increasingly seen as financial risks, but miners are also realizing that there may soon be a competitive advantage in producing carbon-neutral metals: end customers are more conscious of the environmental impacts of their purchases, and some large buyers such as Apple have already started asking for green copper and aluminum.

Power for the mine: less and cleaner Decarbonization can imply many things on a mine site, but for the majority of companies, it starts with the type of energy used to power operations. Rio Tinto’s climate change report showed that 90% of the group’s 32 million tonnes of carbon dioxide equivalent (CO2-e) emissions in 2016 came from the energy it uses. Turning to clean energy sources would, therefore, cut emissions drastically.

Luckily, this is also the easiest transition to make: in many cases, miners don’t even have to invest in a wind or solar plant themselves, and can simply sign a PPA with a renewables operator. Take-up of this solution is booming: in 2018, corporates of all sectors purchased 13.4 GW of clean energy through long-term contracts, more than double the 2017 amount. And according to the International Renewable Energy Agency (IRENA), the materials sector consumes the largest share of this renewable power at 60%. “On average, about 13% of the total electricity consumed by companies in the materials sector came from renewable sources, amounting in 2016 to 165 TWh of renewable electricity,” IRENA says in its 2018 Corporate sourcing of renewables report, citing Rio Tinto, South32 and Vale as the largest consumers, and adding that 30% of the clean energy used in the sector came from PPAs.

The other way miners are cleaning up their power sources is by building their own renewable production capacity on-site. There too, the amount of capacity installed is rapidly increasing: B2Gold, for example, started by installing 7 MW of solar capacity at its Otjikoto Mine in Namibia, and based on the success of this endeavor, has decided to build a 30 MW solar plant at the Fekola Mine in Mali. Resolute Mining also announced a joint development agreement with Ignite Energy Projects at the end of last year for the development of a new 40 MW independent solar hybrid power plant at the Syama gold mine in Mali.

At the Energy and Mines Australia Summit this past June, Gold Fields announced the construction of an 18 MW wind farm, a 4 MW solar farm and a 13 MW battery storage facility, alongside a 16 MW gas engine power station at the Agnew Gold Mine — which is expected to bring renewable penetration upwards of 50% over the long term.

Globally, almost 1.2 GW of renewable energy has been installed at mine sites so far, with another 1 GW in the pipeline, according to the Rocky Mountain Institute (RMI). The mining sector’s clean energy transition is well underway, and with solar, wind and battery equipment prices continuing to decrease, it is only going to intensify.

On top of switching energy sources, miners are also looking for ways to reduce their energy use. Jonathan Dunn, head of international policy and planning at Anglo American, explains: “Two of the main areas where we focus on reducing our carbon footprint are comminution power consumption in South Africa and methane capture at our Moranbah North and Capcoal underground operations in Australia. In both areas, we have implemented business improvements and productivity initiatives that have resulted in a substantial portion of energy reduction.”

Anglo American has also piloted plant trials for its Shock Break technology that allows for savings in comminution power consumption, reducing the need for crushing and grinding, and therefore significantly cutting the energy requirement.

Electrification of material movement: the production bottleneck The second-largest percentage of carbon emissions in the mining sector comes from material movement, including heavy haulage and other mobile mining equipment. BHP, for example, estimates that 35% of its operational emissions come from this part of the business.

As a result, the sector has now started investing in the electrification of that equipment. Anglo American is working on an innovative solution to power haul trucks by hydrogen using solar panels. “By oversizing the photovoltaic generation capacity at a site, we would be able to capture enough hydrogen to potentially power a haul truck, which will help create a smart energy mix that allows us to become carbon-neutral. Our aim is to get, hopefully, in the next 12 months, a truck running around using hydrogen,” says Dunn.

Kirkland Lake Gold was one of the first miners to introduce electric haul trucks at the Macassa Mine in Ontario in 2012. At the time, the capital investment required was even higher than today, but savings achieved on operating costs and on the capital that would have been required to ventilate at the depth of the operations (around 5,700 feet), more than offset the initial investment. Today, 80% of underground operations at the site are performed by battery-electric vehicles, and the mine has achieved some of the lowest carbon intensity in the world of gold mining, at 48kg of CO2-e per ounce of gold.

And while electric trucks are still up to three times more expensive than diesel trucks, the benefits achieved at Macassa are such that Kirkland Lake Gold is now looking to implement mobile equipment electrification at other sites. In this expansion, the company sees the limited supply of electric trucks on the market, as well as the longer delivery times required, as challenges to overcome. These are common concerns for those looking at electrification: they were mentioned by both Nouveau Monde Graphite and Newmont Goldcorp in the latest issue of Energy and Mines Magazine.

Wayne McChristie, Kirkland Lake Gold’s energy manager, explains: “The introduction of battery-powered haul trucks has been a real success story at Macassa. We have learned a lot as we have progressed. We know that it takes considerable time for electric equipment to go from prototype to full production, and we need to plan for that when updating our fleet. We have also learned that the commitment of the manufacturer is critical, given that they often need to make adjustments along the way.”

Electric truck production seems to be ramping up: for instance, Komatsu already offers nine models, and German company Kuhn Schweiz just unveiled the ElektroDumper, the world’s largest electric vehicle with a 5-tonne battery pack. Other relative newcomers are also looking to capitalize on demand. In 2016, ETF Mining Trucks developed a modular 240-tonne mining haul vehicle, with about €25mn of investment — half of which came from large mining companies. The truck offers gains of about 40 to 50% on the price per ton/km, based on a pilot conducted with a Canadian major mining company.

Geoffrey Ejzenberg, the firm’s chief client officer, explains: “On top of not having to purchase fuel, there are a few drivers for this price drop: we have five axles with four wheels on every axle, so every wheel is independently driven, steered and suspended. We have electric motors on every wheel that are independently driven, which means that none of the wheels will slip. You can put more power into the wheels with better grip and function, resulting in faster cycle times so you can effectively haul more than twice the volume of traditional trucks.”

According to him, ETF will be starting its latest development investment program in Q2 2020 with a 30 to 36-month development time, so these trucks should be running commercially on mines by 2023. In the next five years, finding electric hauling trucks should no longer be so difficult for miners looking to electrify their fleets.

Automation and the battery question In terms of working conditions, battery-haul trucks are preferred by the Kirkland Lake Gold’s operators. According to McChristie, “battery trucks are cleaner, quieter, have less vibration and our people clearly like using them.”

According to Michel Serres, North America electrification and automation segment manager at ABB, comfort of use is one of three main benefits that electrification brings to a mine site. “Once an operator starts using electrical equipment, they do not want to go back to diesel, and people are the most important thing,” he says. “Additionally, when looking at electricity price feasibility, you’re able to make projections for the next ten years, whereas diesel prices are more volatile and unpredictable. Finally, when you have an energy company selling you electricity, you don’t have to store it. Diesel storage can be a real headache for mines. This all plays into the viability of an electrification project.”

Still, he warns that using battery-electric mobile equipment comes with limitations: trucks have to be charged every few hours, which means that the distance between trucks and charging stations have to be minimized. “This means that mining superintendents might need to re-think the way they plan everyday work. You have to revisit the way you have been mixing machines, people and technology to take into consideration the requirements and related benefits you will have from getting a clean energy fleet,” he says. ABB recently developed a trolley assist solution for Arctic climates, which is expected to help Swedish company Boliden cut GHG emissions by 80% at the Aitik Mine.

With electrification often comes automation, meaning that operators can be removed from truck cabins and placed in control rooms. Kirkland Lake Gold, for example, already runs trucks tele-remotely between shifts at Macassa, to cover for the two hours it takes for staff to change.

At ABB, Serres warns: “Autonomy may solve some of the human acceptance issues, but it may be difficult to bring both changes at the same time. For a crew that has been doing things in the same way for the past 35 years, it will take some time to fully embrace change. This is no different than in any other work environment.”

Among the other issues that electrification brings to the mining sector, it’s important to remember that batteries have a limited life, after which they need to be disposed of. Kirkland Lake Gold is working with another company and the provincial government in Ontario to take the batteries that come up from the first mobile equipment installed at Macassa, which can no longer perform the work cycle and turn them into GHG saving equipment or energy storage. “We need to think of where we’ll be in another 10 to 15 years if the electrification of mobile equipment continues worldwide, and what this is going to involve in terms of used batteries,” says McChristie.

While the mining sector must continue to reduce carbon emissions from its two largest culprits (energy use and mobile equipment), many other avenues remain to be explored. John Megannon, executive vice-president at MineRP, a mining management software solution, explains that carbon management has so far been approached at an aggregated level. “Mines are not managing carbon at a detailed level, they’re not even reporting and tracking carbon at a granular level where carbon impact is induced,” he says. “It’s not just about energy consumption: it’s also about the carbon footprint of every bolt and cable that you use on the mine: that’s your actual carbon consumption.”

He believes that once mining companies get a handle on the way carbon is involved in their operations at a granular level, carbon could become an extra currency in their treasury system. This would be helped by carbon pricing at government level, which would effectively set the value for that currency across different countries and regions. “This could make a non-viable mining project in a high-carbon pricing region become viable by trading off the carbon with an operation in a low carbon-pricing region. You would handle the volatility of carbon pricing the same way you would handle multi-currency risk in any treasury system with any other currency. All currencies are subject to political volatility anyway,” he explains, adding that the industry doesn’t yet seem ready to manage carbon at this granular level.

Recently, miners also started looking at their scope 3 emissions — those produced by their customers. For years, scope 3 was seen as too difficult to tackle but in 2019, both BHP and Rio Tinto have started taking measures to deal with them. Rio Tinto signed a deal with its biggest Chinese iron ore customer, China Baowu Steel Group, to develop ways to reduce carbon emissions produced by the steelmaking process, while BHP is set to announce carbon reduction targets for its customers next year. The two announcements, made about two months apart, are evidence of the climate competition taking place between mining majors — great news for the planet.