As the world enters a “new age of sustainability”, driven by the Paris Agreement targets, investor expectations and social pressure, the Australian mining industry faces several key questions around carbon emissions. Most countries have committed to reduce emissions in line with the Paris Agreement, although, we’re now receiving a broad consensus from the general community that it’s time to make genuine change. At an industry level, we are receiving pressure from the investment community to look beyond the ‘cleanliness’ of operational assets, but to instead look at every facet of the value chain; from sustainably sourced nickel for batteries to green-powered smelters.
There is a perception in the community that the Resource sector is doing nothing to combat the issue of carbon emissions, which is far from the truth. There is a suite of decarbonisation strategies to choose from and in terms of reducing emissions and cost profiles, renewables are likely to have the greatest efficacy. Renewables such as wind and solar power will help mines electrify, as they can be decentralised and integrated into operating assets. The cost of wind and solar power has reduced significantly, and storage options are possible. In some cases, they will prove cheaper, in terms of their cost of energy, than their fossil fuel peers such as diesel. Energy represents a significant part of the cost profile for any mining operation, with operating costs scaling as high as 40 percent, particularly for those reliant on liquid fuels.
Hydro has even been pumped where the old Kidston gold mine in Queensland, Australia has flooded with water. During the day, solar power is used to pump water to plastic lined ponds on the surface. At night, this water gravitates back to the mine through a turbine and generates power. The power generated is supplied to the state grid as peak power.
We are beginning to see a number of mine sites switching from diesel to natural gas for power generation, where connection to an existing gas line is possible. Other smaller mines are trucking in LNG and converting their diesel engines to gas. The LNG is available from the North West Shelf LNG facility, which helps reduce carbon footprint and emissions.
However, renewables are not the total solution, particularly for mines which operate 24/7 and whose energy requirements exceed the capacity of available daytime wind and solar power generation. The missing link is storage, but this increases the capital costs materially with VRB’s being ideal.
Carbon capture is making headway (in rocks, as algae and chemical adsorption), but no clear solution exists for large volumes of carbon dioxide at a relatively low cost. The learning rate of this technology is improving, and the cost profile is consequently shrinking. There are a range of tactical things around the life and nature of the asset that we need to consider. If the asset life is as long as 20-40 years, a plan can be made for a broader, more strategic investment. Australia is in the prime position for exploitation of natural resources such as sun and wind. It is the Resource Sector’s responsibility to capitalise on this and integrate it into our green or brownfield sites. The sector has plenty of success stories and our story needs to be told more effectively to the market, government and the public.
