The overarching aim of the 2016 Paris Agreement on climate change was for all 196 participating countries to work together to limit global warming to well below 2 °C above pre-industrial levels. The landmark accords stated that this could by achieved by nations reducing carbon emissions as soon as possible and achieving net-zero emissions in the second half of the 21st century. In the five years that have passed since the agreement was ratified, governments, scientists and entrepreneurs have committed huge resources into alternative technologies to power the global economy, with electrification identified as a key route into decarbonising the colossal transport and energy sectors, amongst other areas.
The mining sector will play a vital role in the successful electrification of the global economy, via the ongoing supply of a plethora of critical minerals and metals to power grids, wind turbines and electric vehicle (EV) batteries, to give three examples. However, the entire extractives industry has taken plenty of flack for its own carbon footprint – not just the coal mining sector. In response to building pressure from modern-day ESG investors, almost all mining companies have already taken progressive steps towards disclosing and reducing their Scope 1 and 2 emissions, but the biggest – and almost total – reductions can be gained by designing, building and acquiring 100% electric mines, according to latest research. In early 2021, a new collaborative organisation – Electric Mine Consortium – was created to accelerate the transition towards fully electric mine sites, which offer not just environmental benefits, but also cost reductions to the operators and health improvements to its employees.
The first seeds of the Electric Mine Consortium were planted in a 2020 research report published by the State of Play platform (a partnership between global consulting company VCI and the University of Western Australia). Simply titled ‘Electrification’, the paper was sponsored by the Future Battery Industries Cooperative Research Centre (FBICRC), METS Ignited and Project 412 with the aim to identify the drivers and barriers of mine electrification along with key enabling technologies.
“That research was collaborative with quite a few miners and service companies, but what became pretty apparent through it was that the benefit of electrification was profound and pretty inevitable,” says State of Play’s co-founder Graeme Stanway.
“When we got to the end of that research piece, we asked the original mining members if they were interested in taking it forward and they self-selected around the original members, and the acceleration of the Consortium went from there. But even in the last 18 months the interest in this has stripped initial expectations.”
Original members of the Consortium include well-known players from the mining, services and OEM sectors, including the likes of: Sandvik, Epiroc, OZ Minerals, South32, Gold Fields, Safescape, Dassault Systemes, Energy Vault, Hahn, Horizon Power, 3ME, IGO and Barminco.
More recent additions reveal wide-reaching demand for membership to the Consortium, with major Australian producer Evolution Mining recently joining smaller nickel-gold junior Blackstone Minerals on the team. Meanwhile, electric mining light vehicle developer Zero Automotive and hybrid power generation company Zenith Energy have also signed up to the Consortium, showing the breadth of the organisation across the value chain.
“The mining members and partners we have in place are leading the process,” Stanway says. “Just simply the composition of the membership has given a lot of impetus to other companies to move in this direction. They are banding together and creating scale to test technologies and build datasets that they can rapidly adopt at a lower risk.”
When asked if he was surprised by the level of appetite for a collaborative organisation focused on mine electrification, Stanway points out that an ‘ESG force’ has been building in the sector over the last five or six years.
“Therefore, I wasn’t surprised on the thematic but I was surprised by just how eager the companies were to collaborate in this form. It is rare for the sort of companies in the Consortium to openly work together like this in a fairly broad-based way. But that’s just testament to the trend and demonstrates how important it is to these companies and how interested they are in accelerating to zero carbon outcomes.”
A rare trifecta
So, what benefits do this vast array of companies along the mining value chain see in electrifying mine sites? On its website, the Consortium describes a ‘rare trifecta’ of environmental, economic and health value waiting to be realised through the transition.
Aside from the well-documented environmental value, Stanway firmly believes that the health benefits associated with the electric transition deserve more emphasis, particularly in Australia where older mines are mostly powered by diesel-fired equipment. Research has shown that diesel particulates are the second most carcinogenic contaminant in the country, therefore posing a significant health threat to mine site employees working amongst toxic diesel fumes.
“In Australia over a million workers are exposed to unhealthy levels of diesel particulate, so this is a big issue in the industry. Notwithstanding the PPE in place, the first prize is to eliminate the hazard, which means electrification, particularly in underground mines.”
And on the economic side of the trifecta, Stanway acknowledges that the mobile equipment required for electrified mines is currently more expensive than similar equipment for traditional operations, although he likens it to the EV market, where prices continue to come down with scale.
Based on research contained in State of Play’s Electrification research paper, a fully electric mine will eventually reduce operating costs by 7-15%, including 30-50% savings on energy, 25% maintenance costs reduction and a 40% drop in expenses relating to ventilation.
“These are big cost reductions, to the extent where we’re even seeing some of the smaller entrepreneurial companies looking for assets that can be electrified, as opposed to looking for subsidies. Overall, it’s pretty rare you have such an obvious trifecta like this, which is why it’s moving quickly.”
Overcoming the challenges
The current costs associated with the electric mine transition are one of two major technical hurdles highlighted by Stanway, with the other being the need for greater renewable energy storage infrastructure in Australia and other mining jurisdictions globally.
The Consortium would also do well to bridge the gap between OEMS and mining companies with regards to electric equipment procurement, and Stanway also suggests that risk-averse financiers could obstruct the path to fully electrified mines.
“There wouldn’t be a reason for the Consortium if there weren’t some challenges to overcome, and none of them are insurmountable,” he says. “The first steps are to nail these current challenges that are potentially holding us back; the storage challenge, the equipment challenge, the mine design and the infrastructure challenges. The Consortium is really hitting those hard at the moment.”
So far, the Consortium has helped convert a light vehicle fleet to battery electric across multiple member mine sites and simulated a range of mines and mining methods to establish electrification performance benchmarks, a business case and future mine designs, and tested testing mine scale remote energy storage through installation of multiple technologies at multiple sites.
The next steps for the Consortium will be to ramp up its data transfer between companies in order to accelerate knowledge sharing and eventual adoption, according to Stanway. “Then I think the team will broaden its outlook to the elements related to zero impact or zero carbon [mining]. There’s quite a few areas beyond the challenges we are currently focusing on; I’m confident we will address those further down the line.”