Preparing the face of future mining

Aggreko has delivered hybrid power solutions across four continents. Image: Aggreko

Deloitte’s top 10 trends for 2021 have highlighted the mining sector’s commitment to continual improvement and in laying a foundation for tomorrow. Decarbonisation and zero harm are two of this year’s discussion points in the annual Tracking the Trends report.

Decarbonisation is established as a hot topic in the mining sector, but the trend is set to culminate in a greater way over the next two to three years.

Deloitte Australia’s mining and metals leader Ian Sanders believes the sector is at an inflection point, where the image of mining has significantly improved over 2020 and is set to continue to be a real focus.

Leadership towards decarbonising the industry is being put into action despite Australia not committing to reach net zero emissions by 2050.

BHP, for example, has set a long-term goal of achieving net zero operational emissions by 2050.

The same ambition was last year mirrored by Rio Tinto, which plans to back the target via a $US1 billion ($1.3 billion) investment in climate-related projects over a five-year period.

Rio Tinto’s Koodaideri iron ore mine in the Pilbara region of Western Australia will play a part in this with the installation of a $144 million, 34-megawatt solar plant at the site.

Aggreko Australia, a provider of mobile modular power and energy services, has also committed to invest $450-600 million each year to support its energy transition, with the mining sector being a major part of this.

“Miners are interested in hybrid projects that utilise solar and battery storage and are looking to us to become their independent power provider for the life of their projects,” Aggreko global head of mining Rod Saffy says.

Aggreko has delivered hybrid power solutions across four continents. Image: Aggreko

 

Sanders, meanwhile, notes that many of Australia’s mining majors and mid-tier players are announcing decarbonisation targets that are backed by scientific evidence.

“That will enable them to achieve those outcomes. And now, we’re seeing mining operations starting to deliver on those targets and planning the different activities that will be required to achieve them in their one-, two- and five-year plans,” Sanders tells Australian Mining.

“The mining sector has done a great job in demonstrating to the rest of the world what leadership in decarbonisation can be about.”

Even the interruptions that the COVID-19 pandemic has caused haven’t forced mining companies to pull their foot off the decarbonisation pedal.

Instead, they have continued to put this pursuit at the centre of their agenda; even going as far as not approving new capital projects unless they will enhance the organisation’s sustainable outcomes.

“When you look at the different (decarbonisation) targets mining companies have set for themselves and in making them real, (you’d see) it’s done particularly well as a sector,” Sanders says.

“Asset managers are coming up with great ideas not only to improve productivity and efficiency on a mine site, but also innovative ideas (around the supply chain) to get better outcomes from a decarbonisation and sustainability point of view.”

This proves that the increased talk on decarbonisation isn’t just words, with the drive for sustainable outcomes in this way maintaining its place as one of Deloitte’s top trends for 2021.

Deloitte also points to the issue of trust between the mining industry and its stakeholders as one that is continuing to emerge as a central narrative.

“In July 2020, the World Economic Forum released a report identifying the ‘trust deficit’ as being the key risk facing the mining industry,” Deloitte states in the Tracking the Trends 2021: Closing the Trust Deficit report, which was released in February.

“Success in the future will likely be judged on factors far beyond financial performance. COVID-19 has taught us about the things people value most – safety, community, social impact, the environment.

“Mining companies struggling to overcome a deficit in trust should take these lessons to heart.”

In regaining stakeholder trust, mining companies are building resilience and working towards zero harm – the most important trend for 2021.

Mining companies have greatly expanded their ability to leverage data from different sources, with Sanders saying they now have much more intelligence to combat potential injury.

This has helped ensure that mining companies have a great path to zero harm, beyond the practices they are currently employing to keep employees safe. Zero harm requires the use of predictive analytics to prevent safety incidents before they occur.

By capitalising on safety analytics in a more integrated way than it’s ever been, mining companies can access deeper insights to reach zero harm.

Deloitte Australia’s mining and metals leader Ian Sanders.

“You might have internal data sources, including safety standards, policies and procedures, incident data, safety audits and human resources information around training and maintenance,” Sanders says.

“And you couple that with external data sources such as open source data and data from Facebook and LinkedIn, even, along with that from wearables and telematics.

“Combined together, you’ll end up with much richer information around potential incidents and how to combat those, ensuring that they don’t occur (in the first place).

“This is the real change that has taken place particularly over the last 12-18 months, and organisations are just getting richer and richer (in information) because of that.”

Deloitte reveals that a company it worked with was able to centralise a vast amount of distinct data sources into one common source of truth.

This included aggregating more than 5000 safety incident reports and all human resource, payroll, equipment and maintenance production, census, geospatial and climate-related data for a period of five years.

Thanks to this project, the mining company was able to execute diagnostics at several of its mine sites and design interventions for short-term safety gains and long-term strategic changes.

It uncovered hidden relationships between the company’s individual performance incentive program and incident likelihood, the effects of changing production levels and the impact of age and other socio-demographic characteristics of the employees, according to Deloitte.

“Getting investor trust is really, really important,” Sanders says. “(Therefore,) building resilience, zero harm and decarbonisation are the three things that resonate highly with mining companies.”

Part of mining companies’ focus on build sustainable outcomes is their interest in better understanding the communities in which they are operating.

The goal of co-creating values in their operating regions lies beyond a company’s interest to achieve compliance.

“Mining companies are looking into local businesses and the areas of supply chain and education to make sure they are not only giving back to shareholders in the form of dividends,” Sanders says.

“Even though nothing is perfect, the mining sector has made a significant level of improvement. And I do think we’ll continue to improve.”

This article also appears in the March issue of Australian Mining.

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