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Article

Powerful solutions to mining’s energy problems

Approximately seven per cent of the world’s energy is consumed by mining. What aspects should we consider in order to reset energy consumption in mining?

28 September 2020

Contributors

contact-Mark Fraser

Mark Fraser

Account Director

Mining is a substantial contributor to the world’s greenhouse gas (GHG) emissions. According to a UN study, the extraction and processing of materials, fuel and food are responsible for half of the world’s industrial emissions. It is an industry that is right up there with oil and gas in terms of an unsustainably large carbon footprint. Why is that? The short answer is – energy. Approximately seven per cent of the world’s energy is consumed by mining. Every single stage of the mining value chain consumes a lot of energy – drill and blast, haulage, processing and transportation. Mining companies have had, what some experts call, an addiction to coal, diesel and natural gas for decades to meet their energy requirements.

 

But it cannot go on like this. “The fact is, if we were to continue to mine the same way that we have been doing over the past six decades, we will not be able to comply with the environmental and climate change regulations and commitments that every country has under the Paris accord. That’s why there needs to be a shift in the mindset,” says Ali Madiseh, Canada Research Chair in Advanced Mine Energy Systems, also Assistant Professor Norman B. Keevil Institute of Mining Engineering, University of British Columbia. He spoke to Axora from Vancouver, Canada.

But concerns over climate change isn’t the only reason for a shift in mindset. There are other factors at play as well. A report by Ernst & Young states, “The mining sector is expanding into new and often remote locations as a response to increasing demand from growing emerging markets. This often means having to deal with unreliable power supply from the grid and uncertain power prices.” In many cases, diesel is used to generate power. But the rising cost of fossil-based fuels is making them unviable. Also, the pressure to reform the sector and cut back on GHGs is now being led by many public groups, governments and investors.

In this interview, we consider various aspects of resetting energy consumption in mining – studying the energy mix, thinking of customised solutions, the latest trends in the renewable energy space and regulations that are encouraging companies to make drastic changes.

Factors that affect energy solutions at a mine site 

Making broad assumptions about energy consumption in mining can be tricky. Before identifying what changes can be made at a mine, you must first consider a number of factors. “The first distinction is between surface and underground mines. An underground mine usually needs more electricity per tonne of rock mined compared to a surface mine (if it is very deep, a lot of energy will be used for moving and cooling air). On a surface mine, use of shovels, dozers, trucks (for haulage and dumping) consume a lot of power. Then there are mines that are connected to the grid and others that aren’t,” explains Prof Madiseh. Electricity from grids can be cleaner. “In Canada, several mines draw on electricity that is generated by hydropower.” But many mines are located in remote areas and may not be connected to the grid (or a stable grid system).

Also, studying how much energy is consumed and for what purpose is crucial. “The design of your energy system depends on the use case. When the mine needs, say, 30 per cent of its total energy as motive power or 20 per cent of its total energy for heating or cooling the energy solutions can be quite different to another mine that has a different energy consumption mix.” Also, mines differ quite significantly based on the commodity that is being extracted. The life of the mine is also very important. It could be a greenfield mine (a new project) or one that is already up and running. With a new mine, the possibilities can be very exciting because you can use the latest technologies. With an existing mine site, you are essentially retrofitting systems. Many existing mines have short lives but they often get extended, this can lead to mines with 5 years left ending up operating for decades longer. “When you walk into a CEO’s office, you’ve got to be prepared to answer questions around payback time. You cannot expect to get the approvals for a renewable energy project with a payback timescale that’s longer than the life of the mine itself,” says Prof Madiseh. One size doesn’t fit all – it’s important to design solutions based on factors like the commodity, grid capability, sources of power, consumption mix, the type/ life of mine and location (among many other factors).

The push for renewables: climate change concerns, government regulations and investor pressure   

The Paris agreement aims to reduce GHGs and hopes that signatories will stay on track and keep a global temperature rise this century, to well below two degrees Celsius. To achieve this, CO2 emissions will have to be cut by at least 50 per cent by 2050. “To limit warming to 1.5°C, a reduction of at least 85 per cent would likely be needed,” notes a report by McKinsey. The report is candid about the mining industry’s approach and the need to take sustainability even more seriously. “Mining companies’ published emission targets tend to be more modest than that, setting low targets, not setting targets beyond the early 2020s, or focusing on emission intensity rather than absolute numbers.” Investors are also demanding that mining companies improve in this area. One way to do this is to switch to renewable sources of power. Many mining firms are struggling to meet these goals due to SCOPE3 targets, which make companies account for downstream processing outside of their own control. The best example is the major Iron Ore producers accounting for the CO2 emissions of steel production in China.

BHP Scope 3 Emissions estimates (BHP Climate Change Report 2020) 

The lowering of emission targets has also caused miners to very publicly back away from Coal in the last 12 months, with Rio Tinto’s exit and BHPs intention to exit coal due to investor pressure. Securing a good price for these assets, which are still highly profitable, is causing a significant headache when combined with the pressure to remove coal from the production mix.

Creating opportunities in the mining sector  

Mining companies are responding. Some of the big names in mining have signed up to the Task Force on Climate-related Financial Disclosures (TCFD). They “will develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.” Companies have also set individual targets and have publicly announced projects that showcase their commitment to the use of renewable sources of energy. BHP announced last year that renewables will power 100 per cent of its largest copper operations in Chile by 2025. Rio Tinto intends to reach net-zero emissions by 2050 and invest $1 billion in research projects. Anglo American announced that it would use 100 per cent renewable sources to power its operations in Chile from 2021.

Many other companies have made similar announcements. Interestingly, these aren’t just environmentally friendly decisions, but in most cases, profitable ones as well. “The dramatic reduction in solar and wind energy costs in recent years means renewable energy is an increasingly attractive alternative to fossil-fuelled power, for remote mines not connected to the electricity grid,” the Ernst and Young report says. If the mines are connected to a grid, some of the excess power generated could be sold back into the grid – generating a profit.

Trends and future horizons: electrification, hydrogen and electric   

In the near term, electrification that largely depends on clean sources of power seems to be the way forward. “Solar and wind are the cheapest forms of new generation capacity in two-thirds of the world. This means miners can negotiate off-site, long-term power purchase agreements, at lower prices than thermal generation,” observes a report by Bloomberg NEF. But there’s an important roadblock here. “Mining projects are designed to operate 24 hours a day and 365 days a year, and consequently require stable electricity access without interruptions. Solar and wind power can only be generated when the sun is shining and the wind is blowing,” points out a report by the Columbia Centre for Sustainable Investment. The model will have to be a hybrid one that combines a few sources of electricity.

Apart from electricity, two longer-term alternatives are also being looked at seriously – hydrogen and electric batteries. Let’s compare the two. “We know that massive trucks used in mining consume a very large amount of diesel. With hydrogen it is pretty much like filling up your tank; it is clean, and it is good. You don’t need as big an infrastructure on site for hydrogen, as you’d require for batteries. Hydrogen is a bit more expensive (than electric batteries) but if society accepts hydrogen on a bigger scale, costs will come down. If hydrogen can replace diesel it will bring down the total usage of energy on a mine because you wouldn’t have to ventilate the mine anymore,” explains Prof. Madiseh. We just don’t know what the future will look like yet. Big companies like Tesla have bet big on electric as the future and some others are looking at hydrogen. “It will be interesting to see which one of the two becomes dominant.”

When it comes to batteries, there are a number of key issues - notably their size, weight and energy density. Energy density in batteries is far lower than diesel or hydrogen. A Tesla battery for example, contains around 711 watt per litre whereas diesel is around 10,000 watts per litre. This means you need 14x the volume to store the same amount of energy. This will inevitably come with more weight - as batteries weigh more - which is less efficient overall as you need to haul that extra weight and manage the issue of finding more space. Clearly batteries and motors are not the same size as a normal engine and there are many diesel electric mining trucks which utilise the engine, simply to generate power to drive the motors on the wheels. The other consideration will be energy use and time to refuel. As mentioned, you cannot simply refuel a battery in the time it takes to refuel hydrogen or diesel. This will impact fleet size as more trucks are likely to be needed due to recharge downtime and infrastructure.

The hunt for sustainable solutions has led mining to look for answers in electric power generated by renewable sources. Hydrogen fuel cells and electric batteries are also other options. Prof Madiseh believes that the alternatives that will succeed in the future will have to be leaner and greener; move away from diesel and will need to be self-reliant and stable. “Diesel dependence can be compared to an addiction. You need to wean it off gradually.”

Time is ticking and alternative technologies will have to be deployed fast to make mining sustainable and comply with climate change targets.

This article is a part of our Innovation Leaders in sustainability series. For further articles, valuable insights and a look into sustainability solutions, visit our Innovation Leaders page here

28 September 2020

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