The original equipment manufacturer (OEM) is set to make batteries not only part of its underground machinery, but also the service it provides mining companies.
Battery electric technology is becoming further entrenched in Epiroc’s future. So much so, the OEM plans to launch a business model that will provide an end-to-end service for this emerging part of the company.
Batteries-as-a-service, revealed during the Austmine 2019: Mining Innovation Conference, will complement Epiroc’s transition from diesel equipment to battery electric machinery.
It will be another part of the company’s ambitions to lead mining towards a sustainable future with zero emission machines.
Epiroc has rapidly moved in this direction in recent years, taking a key step in 2016 by releasing its first generation battery electric machinery, which focused on smaller models of underground trucks, loaders and drills.
In 2017, the Swedish company started development of a battery platform involving scalable, modular architecture that could be used across its product range, from the smallest to largest machines.
The OEM, late last year, unveiled its second generation battery electric equipment, which includes a number of larger machines that will appeal to a broader market, particularly in Australia.
To support this expansion, Epiroc realised it needed to change the way it does business to accelerate the transformation.
As Epiroc introduced its new battery system, the company also started to plot the Batteries-as-a-service business model to take its development breakthroughs further.
Epiroc is shaping the business model to remove the obstacles that come with a transition to the technology, providing an ‘instant technology leap’ to battery electric machinery.
Batteries-as-a-service will move the upfront costs of batteries from capital expenditure to operational expenditure, with the responsibility of this function assumed by the OEM.
Epiroc senior executive vice president, mining and infrastructure, Helena Hedblom believes Batteries-as-a-service will be a natural choice for many customers.
“The bigger mining houses often have the capacity to buy it all, but for the smaller and mid-sized customers the capital expenditure (of battery electric machinery) could still be resistance,” Hedblom tells Australian Mining.
“We believed if we could find a way to turn the batteries into OPEX we would have customers wanting to try this, especially as we expect the technology to improve every year.
“With this model we can put the new technology in as it is developed, which is not the case if we just sell the batteries. By that we can have a seamless improvement of technology into the fleet that is out there.”
The OEM hopes to enhance the role it is playing to quickly move the mining industry into a battery electric future with the service.
Epiroc business line manager Shaiful Ali says the Batteries-as-a-service concept is similar to the business model mobile phone and telecommunications companies use.
Mining equipment batteries, like mobile phones, are expensive to buy outright for the consumers that purchase them. However, if they are procured as a service on a monthly or yearly plan then the upfront expenditure is significantly reduced.
“We decided to use that model for our battery machines,” Ali tells Australian Mining. “Our service will provide the battery at a monthly nominal fee where Epiroc will be responsible for the management of the battery, the model advances of the batteries and the disposal of the battery.
“By doing that it reduces the capital significantly, but we have also duplicated that OPEX model for the battery.”
Australian mining companies are already showing interest in the prospect of a Batteries-as-a-service model, Ali continues.
The interest comes around six months after Epiroc released its second generation battery electric equipment, which the company is confident will be attractive to Australian mine sites.
Epiroc anticipates that Australian underground miners will increasingly pursue battery electric opportunities as the technology improves from an economic perspective.
“That’s mainly because in Australia there are not a lot of greenfield mine sites – a lot of the mines in Australia are going deeper,” Ali says.
“Obviously as you go deeper it gets hotter and it’s a driver for certain mining companies to sustain the mine life. The drivers for batteries are also obviously the cost savings involved with ventilation and the safety aspects they provide.”
The OEM expects an Australian mine to receive a machine from its second generation battery electric fleet by the end of the year.
Second generation machines
Epiroc’s latest battery electric machines are the company’s next step towards transforming its core product line from diesel to electric over the next five years.
The second generation portfolio includes 14-ton (12.7-tonne) and 18-ton Scooptram Battery loaders, the Boomer E2 Battery drill and the 42-ton Minetruck MT42 Battery.
Epiroc believes it has proven the technology readiness of the second generation fleet alternatives through 80,000 hours of real-time operation of its first generation machines.
Its customers using the first generation machines include Brazilian mining company Nexa Resources, which operates a Scooptram ST7 Battery in Peru.
When developing generation two, Epiroc no longer questioned if battery electric technology could compete with diesel, shifting its focus to expanding the offering.
“The technical challenges have been solved as we have 80,000 hours on the generation one machines, but we were stuck with how we could scale them,” Hedblom says.
“The biggest improvement we needed with the second generation was to make it scalable because if you look at our complete offering it is quite big.
“This system is scalable, whether it is a truck, loader or drill, you decide how much energy to take. It is a completely modularised concept.”
Epiroc’s approach to the design and architecture of the second generation platform required it establish different partnerships to upgrade the battery electric technology.
The company partnered with ABB to develop the latest electric motors, which are designed with minimal use of rare metals, but maintain high standards for energy efficiency and performance.
Epiroc also formed an agreement with Northvolt to enable it to scale production and match the volume of batteries that it will require as demand ramps up.
The platform is developed to be on par with the leading battery solutions in the world, but to also provide the flexibility to improve over time as the energy density of battery cells increases.
Epiroc last year introduced the battery system for the needs of heavy duty equipment, as well as mining requirements in terms of performance, reliability and safety.
“Our ambition is to produce the worlds greenest machines using the world’s greenest cells with the greenest technologies available,” Hedblom says in her Austmine presentation.
Epiroc’s partnership mentality will also include smaller OEMs as it rolls out the Batteries-as-a-service business model.
The company intends to remove the challenges these OEMs face with the transition to battery electric technology.
“We are now working together with several of the smaller OEMs to electrify their fleet as well. With Batteries-as-a-service we will offer an instant seamless tech leap to our customers. We are trying to focus on reducing the obstacle and make it easier to go electric,” Hedblom says.
This article also appears in the July edition of Australian Mining.