To implement large scale renewable energy solutions in the mining industry takes vision, up-front costs, an adaptable position on risk, and commitment. But the eventual benefits of biting the bullet today will ensure all that ore can be sustainably accessed tomorrow.
Whether mining companies develop renewable solutions themselves or they call in expert suppliers for large scale solutions, efforts are being made around Australia to decarbonise operations and supply chains.
In an Electrification report by State of Play – the world’s largest mining research platform – a survey found 61 per cent of respondents saw renewable energy generation as the first step in the transition to all-electric mines.
Luckily for those 61 per cent, companies like Gold Fields have made it clear how to get started.
At the gold major’s Agnew and Granny Smith gold mines in Western Australia (plus the Gruyere gold mine, a joint venture with Gold Road Resources), Gold Fields has adopted a range of hybrid renewable energy solutions with help from energy companies EDL, Aggreko, and APA Group, respectively.
Gold Fields manager of energy James Koerting says while the immediate cost of renewable energy solutions can be confronting for some businesses, it only takes a simple change of mindset to realise the potential.
“The way I look at it, it is just a change in the risk profile,” Koerting tells Australian Mining.
“The traditional power solution was a lower up-front cost diesel power station, with a high operating cost to run with lots of diesel fuel. With renewables, it flips so that the cost is up-front and the operating cost is much lower.
“So, to change the risk profile you really need to be confident in the mine’s ore reserve and have a strong balance sheet to finance the larger investment up front.
“If you’ve got those two boxes ticked, you’ll be able to benefit in the long term – for our Agnew mine it’s after 10 years – and you’ll benefit from the low operating costs going forward.”
The electrification report also found that 83 per cent expect renewable energy technologies will significantly change mining operations over the next 15 years.
But as Aggreko head of mining Rod Saffy says, it’s in the industry’s best interests to get moving on renewables now to allow time for their implementation.
“The inclusion of renewable energy is going to be consistent and growing over the next 10 years,” he says.
“But it’s important to consider the expectations around what people want versus the reality of putting it on the ground. Contracts take time and installation takes time.
“If you decided today that you wanted a solar farm, as with any contract you’d need to run through a tender process and then eventually implement it.”
The process to develop the microgrid at Gold Fields’ Agnew gold mine was indeed lengthy but equally worth it – becoming the first mine in Australia to incorporate wind energy at such a scale.
Developed with Gold Fields by sustainable energy producer EDL, the Agnew renewable hybrid microgrid has a total capacity of 56 megawatts (MW) and produces 50 to 60 per cent of the mine’s power from renewable energy.
EDL chief executive officer James Harman says his company took learnings from a pilot project at the Coober Pedy power station and applied them at Agnew.
This 10-year-old diesel power station in Coober Pedy now runs on solar, wind, battery and diesel at more than 70 per cent renewable energy.
The key, however, was the reliability factor, and providing confidence to Gold Fields and the mining industry that these hybrid solutions are more reliable than the incumbent solution.
“We took confidence that we could make the integration of the tech work,” Harman says.
“We proved to ourselves and to the industry you could turn off a lot of the diesel and actually be more reliable. After implementing renewables at Coober Pedy, the reliability there was outstanding at around 99.9 per cent.
“Agnew was an even bigger call because Gold Fields was previously connected to another energy supplier and we had to show them we could be more reliable.
“We’ve been incredibly reliable at Agnew and all credit to Gold Fields for having the vision and putting their trust in us.”
Key to putting this vision into practice was the initial support afforded by the Australian Renewable Energy Agency (ARENA), first at the Coober Pedy power station and then at Agnew.
The Coober Pedy power station was roughly half funded by ARENA, while the $113 million microgrid at Agnew received $13.5 million from the agency.
Harman says this was a perfect representation of how government and private companies should work together to develop new technologies.
“It works best when there’s cooperation and collaboration and we recognise the contribution that ARENA has made,” he says.
“Now, we don’t need ARENA funding for the type of hybrid renewables that will benefit the mining industry.
“This is a great example of government supporting pilots, proving up the technology and then stepping back to let private enterprise run with it once it’s commercialised.”
Fortescue Metals Group chief executive officer Elizabeth Gaines agrees that these issues aren’t for anyone to take a back seat on. Rather, collaboration is the key to success.
“Avoiding the worst impacts of climate change is a challenge for all of government, private sector and civil society,” Gaines says.
“Collaboration by and between them is critical to solving a challenge of this scale. It is heartening to see many governments and businesses accelerating their emissions reduction targets as society and investors are demanding it.”
This responsibility to investor sentiment is one felt around the industry, as calls for decarbonisation ring from many corners of the country.
Aggreko was responsible for the construction of Gold Fields’ Granny Smith gold mine’s renewable microgrid – another of the world’s largest – including a 7.7MW solar farm.
Saffy says renewable solutions – big and small – are part of every conversation he has.
“Every tender we get nowadays, irrespective of the duration of the contract, there is a request for a portion of renewables,” Saffy says.
“Government, institutions and investors may not tolerate companies which aren’t moving towards decarbonisation. Without considerations like renewables, miners will find it increasingly difficult to get investment as well as approval to operate.
“Along with safety, this is becoming a must-have instead of a nice-to-have.”
That is, a nice-to-have for the environment as well as for the people working on site too.
Harman says one of the most pleasing outcomes upon installing the microgrid at Agnew was the response from the workforce.
“One of the big positives of the Agnew project was just how proud Gold Fields’ employees are that their energy is coming from renewable sources,” he says.
“It’s provided a real boost to the mine and the mining operators to know they’re doing their bit on decarbonisation.”
Moving forward, each of these leaders in energy innovation agrees that more work must be done to advance the technologies required to make use of all this renewable energy potential.
Of course, it’s all well and good to source the renewable energy, but for now, mines run on machines and not megawatts.
Saffy asks the question on the electrification of equipment across the industry.
“The other issue to be tackled: how will the miner of the future use their power?” he says.
“With a strong move to switch mobile equipment from diesel powered to battery powered, miners will need to consider how they manage this fleet differently.
“The average mid-sized mine has around 50 utility vehicles on site – so how does that look when they all need to be regularly charged?
“On top of that, there’s hundreds of pieces of mobile equipment on site running on diesel that will inevitably switch to battery power – all of which will need distributed charging stations.”
Koerting agrees that some of the efforts in renewable energy will be overshadowed unless the machinery and equipment follows suit.
“The thing about battery-electric vehicles is they’re not emissions free unless you charge them with renewable energy,” he says.
“If you’ve got a diesel power station on site and you charge the batteries with the diesel generators, then all you’re doing is moving the diesel to the surface.
“This is still great from a health and safety perspective – you’re moving the particulates out of the mine – but the ultimate goal when talking about emissions reduction is to remove diesel altogether.”
At Fortescue, the major iron ore miner is powering towards a goal of carbon neutrality by 2030, with efforts in hydrogen-powered rail freight, electric haul trucks and green iron ore all helping the cause.
Gaines says an electrified mining fleet is a top priority in tackling decarbonisation.
“Decarbonising our mining fleet is one of the biggest challenges facing our industry,” Gaines says.
“While electric light vehicles are readily available for the passenger and domestic market, there are currently no economic or technologically viable, large-scale vehicles available for the mining industry.”
Across the industry, the issue is being tackled in several ways, some more immediately effective than others.
One solution involves collaboration within the industry to develop decarbonisation strategies and technologies, which Gold Fields engages in through the Electric Mine Consortium and the Charge On Innovation Challenge.
Both initiatives welcome industry input to several major mining companies, which can then take the learnings and accelerate the decarbonisation of mining.
Koerting says it’s been good to use these initiatives to develop Gold Fields’ relationship with some of its valued manufacturers further.
“We’re working towards designs and developments for an all-electric mine thanks to some of the original equipment manufacturers involved such as Sandvik and Epiroc,” he says.
Another solution to technically decarbonise mining operations – although one step removed from the site itself – is carbon offsetting.
This is the process of commissioning or investing in activities which remove carbon from the atmosphere and attributing that carbon saved to an emissions-intensive activity such as mining.
Carbon offsets could be achieved through initiatives as simple as tree planting – though with Agnew’s microgrid avoiding around 46,400 tonnes of carbon dioxide or equivalents each year, the same feat would take around 140,000 to 232,000 trees over 15 years, according to some estimates.
Other programs involve soil regeneration, and further renewable energy projects off site.
Harman explains why carbon offsetting is an important part to decarbonise the mining industry.
“It’s not just about energy used at the mine, it’s also the wider businesses’ carbon footprint, including haul trucks, shipping and supply chain emissions,” he says.
“Some of the harder to decarbonise processes need credible carbon credits to generate offsets. We’ve been involved in producing these for many years and in the last 12 months we’ve seen a massive uptick in interest from the industry.”
And most positively, this green sentiment is one shared across the industry. With companies like Gold Fields and Fortescue leading the way, there are fewer excuses than ever for industry to skim the blueprint.
“The sentiment is very positive. When Aggreko views investor presentations by mining companies, it’s almost always the first thing they speak about,” Saffy concludes.
“They discuss what they’re doing about carbon emissions, what they’re doing about the communities they operate in, and what they’re doing about the responsible governance of their organisation.”
This article appears in the October issue of Australian Mining.