Anglo-Australian mining giant Rio Tinto announced last week that it will build its first in-house solar plant to power mine operations, adding to a slew of recent renewable energy pledges from mining companies. But while solar and wind have an obvious role to play in helping mining operations control their carbon emissions, the industry faces steep decarbonization challenges, analysts say.
Rio Tinto says it will invest $98 million in a 34-megawatt PV array and 12-megawatt-hour lithium-ion battery system to help power its Koodaideri mine in Pilbara, Western Australia.
The solar plant is expected to cover all of the mine’s electric power needs during peak solar generation hours and 65 percent of its overall electricity consumption. Rio Tinto will start building the plant soon and is looking to complete it next year.
“We are investigating additional renewable energy options in the Pilbara [region] as well as other opportunities to reduce emissions across our entire global portfolio,” Chris Salisbury, Rio Tinto’s chief executive for iron ore, said in a statement.
Around the world, mining companies are starting to set concrete renewable energy goals amid pressure to cut emissions, with some firms announcing 100 percent targets for major mines. Last October, Australian mining giant BHP announced plans to power its Escondida and Spence mines in Chile fully with renewable energy from the middle of this decade onward.
Escondida is the world’s largest copper mine, and converting it to renewables would require the equivalent of 2 gigawatts of solar energy, according to Verónica Martinez, climate change lead at the International Council on Mining and Metals, the mining sector’s main industry body.
BHP has already signed four renewable power agreements that it said would cut energy prices by 20 percent compared to existing coal contracts.
Another mining behemoth, Anglo American, will power its Chilean operations entirely from renewables after 2021. Enel Chile will supply renewable power for Anglo American’s Los Bronces and El Soldado copper mines and Chagres smelter, Reuters reported.
Anglo American has partnered with Engie to develop the world’s largest hydrogen-powered mine haul truck, which is expected to begin testing this year at a metals mine in South Africa. Anglo American has also installed an 84-kilowatt floating solar array at its tailings pond at Los Bronces, a first for the industry, Martinez said.
Meanwhile, Antofagasta Minerals has pledged to go fully renewable at its Zaldívar and Antucoya projects, and Collahuasi, a joint venture between Glencore and Anglo American, is expected to be powered completely by renewables by some time this year or next.
Brazilian mining giant Vale has gone a step further with a pledge to achieve self-sufficiency with renewable energy by 2030.
No easy route to mining decarbonization
Still, many other mining companies have stopped short of committing to hard-and-fast targets, including those already embracing renewables. Rio Tinto, for example, says that 71 percent of its energy now comes from renewables, yet it has only set a goal of “substantial decarbonization” by 2050.
Glencore, the sector’s biggest carbon polluter in 2016 according to an analysis by Rocky Mountain Institute, is on target to cut emissions by a mere 5 percent between 2016 and 2020. Both Rio Tinto and Glencore are expected to unveil new targets this year.
Cutting mining’s carbon footprint to zero is complicated by the fact that electricity use only accounts for around 40 percent of direct emissions.
“Even if the industry switched to 100 percent renewable power supply, there are still important challenges associated with the remaining 60 percent of emissions, which mostly come from the use of fossil fuels throughout the mining process,” said Martinez of the International Council on Mining and Metals.
Indirect or “Scope 3” emissions, which emanate from a company’s upstream or downstream value chain, can be around 10 times as large as direct emissions and are much harder to track and manage.
Despite the recent announcements on renewables, the mining industry’s progress toward a lower-carbon future remains sporadic, and its success is no sure thing.
Rocky Mountain Institute’s Renewable Resources at Mines tracker shows the level of renewables commissioned for mines fell steeply in 2019, to around 100 megawatts, less than a third of the amount seen in 2018.
Growing demand for low-carbon supply chains
“Focus and commitment to decarbonization vary across the industry, and it is hard to rank the overall sector,” observed John O`Brien, a partner at Deloitte Australia who specializes in the energy transition. “In many mature markets, there are companies that lead other sectors, but in other geographies where companies are not under the same investor or community pressure, they would lag other sectors.”
Increasingly, though, investors are creating an environment where large mining companies “must take a strong position on emissions reduction, both in terms of declared targets and then through tangible actions,” said O`Brien.
This pressure, which comes on top of community expectations and regulatory frameworks, has so far been stronger in Australia and Europe than North America, he said. The sector is also moving toward renewables because they are cheaper than fossil-fuel energy sources.
This is particularly true of mining operations in sunny regions such as the Australian outback and the Atacama Desert in Chile, but it is also becoming the norm in many other markets.
“The mining industry has started to become a significant corporate buyer of renewable energy in regions where these technologies have become reliable and cost-competitive compared to fossil-fuel-based electricity, such as South America and the Nordic region,” Martinez said.
In this respect, the mining sector is merely following a trend that is emerging across other industries.
Mike Peirce, corporate partnerships director at international nonprofit The Climate Group, which tracks corporate decarbonization pledges, said, “One in two of our members committed to 100 percent renewable power through the RE100 initiative is experiencing cost savings.”
What is likely to get mining companies more engaged with renewables is if, or when, commodity markets start paying premium fees for low-carbon-footprint products. Martinez said this is still generally not the case, but Deloitte’s O`Brien said a trend is starting to emerge.
“Producers of products from smartphones to batteries to electric vehicles are all starting to look for supply chains that can deliver carbon-neutral raw materials,” he said.
“This means that mines will need to have a carbon-neutral product range to be able to sell into that supply chain, and in the end, this will provide the strongest driver for mining companies to leverage renewable energy solutions.”
Source: Greentech Media