Hydrogen has the flexibility the mining industry needs

MELODIE MICHEL, Reporter, Energy and Mines

With ambitious net-zero targets looming around the corner, miners are increasingly looking to renewable hydrogen for versatile solutions with the potential to decarbonize entire value chains. Energy and Mines speaks to Michèle Azalbert, CEO of Engie’s Hydrogen Business Unit, to understand why hydrogen is such an important part of the mining sector’s decarbonization pathway, and what is needed for this technology to become commercially viable.

Michèle Azalbert: Mining is truly at the centre of the energy transition: today, extractive industries are responsible for half of the world’s carbon emissions and more than 80% of biodiversity loss, according to a UN Global Resources 2019 Outlook Report. Minerals are everywhere in our daily lives, so we need them to be extracted in a sustainable way, or the energy transition will not make any sense. It is crucial for us at Engie to develop solutions to decarbonize the mining sector, and we think that renewable hydrogen has the flexibility to address the processing and operational challenges of the mining industry.

Within the H2 market today, we see both electroyzer and fuel cell manufacturers taking their products to the next level, increasing scale and production capacity. This will bring the cost of the technical equipment down and contribute to accelerating the scaling up of the hydrogen economy. This is good news for mining companies, as it means that hydrogen solutions will soon be available at the required scale and price to reach a viable business case.

MA: There are countries today that have abundant renewable resources in the same areas where mining operations are significantly present. That’s the case of Australia, where the mining industry is the fourth-largest consumer of energy. There are other examples, like Chile or South Africa, and these countries hold the most nearterm renewable hydrogen opportunities in our view, to produce renewable hydrogen for mines but also to develop the hydrogen ecosystem beyond the mines.

MA: Engie is already deploying different bricks of the puzzle: ammonia nitrates for blasting services, renewable hydrogen-powered train and storage solutions, and we could replicate these solutions right now in many places. Two of the most visible projects we have in the mining industry is our project with Anglo American in South Africa and the Hydra project in Chile with a consortium of mining companies and partners. Both of them are focusing on the same application, which is to develop a renewable hydrogen-based solution for heavy-duty mining trucks. But hydrogen solutions for mines go well beyond that. We are currently working with customers and partners on solutions that could decarbonize the complete mineral value chain from the point of extraction to the end application. It’s about ammonia nitrate, but also transport by trains or by ships, ore carriers, processing, and refining minerals, and energy storage

MA: We see mainly three challenges ahead. The first one is advocate collaboration between all stakeholders, including technology providers and OEMs, to co-create the required technical solutions and to shorten the time to market. The second challenge is the scaling up of the equipment and the technologies to bring costs down. Third, we need to implement the relevant regulation at country level to accelerate the deployment of safe and affordable renewable hydrogen solutions. This is about solving the famous chicken-and-egg problem: we need to create demand so that manufacturers are able to scale up their solution to bring costs down.

MA: When you look at cost, it’s not only the price of the hydrogen solution but the total cost of ownership (TCO) you need to consider: how much does the hydrogen solution contribute to the cash cost of the minerals vs. conventional fuels, taking into account all parameters such as maintenance costs, productivity, system efficiency, logistics cost to transport minerals to the mine and all logistical issues. Based on this, some of the hydrogen solutions for mining heavy duty equipment could already be viable today in some places. They may become competitive in the next five years in other geographies. What needs to be done today is to make sure that these technical solutions are available in the short term. Beyond that, we need the cost of hydrogen to continue to fall significantly in order for all the other bricks to happen in the short term. The cost of electrolyzers went down 45% in the last five years already, the cost of solar power went down 80% over the last 10 years and is expected to continue to decrease, and it’s the same for wind power. So we estimate, and this is a widely shared view in the industry, that renewable hydrogen could be competitive by 2030 in the best geographies.

MA: The advice we give to mining companies is to start by developing a holistic approach, activating the technical integrated solution and then scaling it up, pulling different types of uses. Create a roadmap and deploy it step by step. That will allow the mining operator to define a clear pathway to net zero and to invest in the best and most competitive technologies in the short and in the long term, while ensuring compatibility of these investment with the selected technologies of clients. We are committed to supporting our clients in their pathway to carbon neutrality, by providing turnkey solutions and managing the complexity for them, as assembling all the pieces of a solution and ensuring a reliable supply of renewable hydrogen is not that easy.