With decarbonization high on the agenda and challenges surrounding the seemingly insatiable demand for high-value metals and crucial minerals to fuel global electrification initiatives, the mining industry is under intense pressure to ramp up production while reinventing itself in line with ambitious sustainability goals.
This year’s FT Mining Summit and MINExpo International show in Las Vegas brought together members of the global mining industry at a time of great change. A critical area of focus for many companies is the development of low-carbon operations, including the electrification of their off-road vehicles.
A recent report on the mining industry by management consultancy Vendigital examined the many challenges facing global mining companies. These include: how to meet global demand for critical minerals; how to keep up with ever-evolving technology; how to create a fully trained workforce; and how they can integrate environmental, social and governance (ESG) principles into their activities.
As a result of these competitive, multifaceted challenges, there has been an increase in merger and acquisition activity in the industry, including asset divestitures and portfolio recalibration, to help the industry keep pace with the rapid changes taking place are coming.
Governments around the world are accelerating the push for sustainability, and the mining industry is responding proactively.
However, long-term change programs are never easy, and there is plenty for companies to consider as they embark on their own net-zero journey and focus on electrifying the mining fleet.
Where the mining industry looks to decarbonise its own operations, companies embarking on fleet electrification will need to carefully consider how to meet this huge capital investment, which will be intensified by further costs associated with engineering, maintenance, training and construction of charging infrastructure in remote locations.
Of equal importance is the commercial and ownership model of electrified fleets, such as whether they are ‘owned’ or ‘hired’. This will determine the level of investment required at the planning stage, paying attention to the different tax implications associated with using capital expenditure (capex) or operating expenditure (opex) and how these are taken into account.
The sheer scale of operations and the size of mining vehicles present a unique set of challenges. These are further compounded by the inherent health and safety requirements associated with mining operations.
When it comes to essential electric vehicle (EV) technologies, there are few established products or processes to build upon. As such, companies must work with the supply chain to accelerate new product development, onboard capacity and limit the risk of supply disruption on the path to decarbonization.
Mining companies must embrace the principles of the circular economy in their quest to decarbonize. Credit: Khanchit Khirisutchalual / Getty Images.” loading=”lazy” height=”400″ width=”600″ class=”yf-g633g8 loader”/>
Mining companies must embrace the principles of the circular economy in their quest to decarbonize. Credit: Khanchit Khirisutchalual/Getty Images.
Mining companies must remain committed to their contribution and impact to the circular economy, especially given the potential shortages of key and critical minerals due to growing demand from the renewable energy and electric vehicle sectors.
Understanding the distribution of demand across different technologies, as well as the available supply of these raw materials through recycling programs, will determine the future of mining operations, inform the continued calibration of portfolios and the continued development of future technologies.
In addition, the increasing role that data and AI play in the green transition should not be underestimated.
From providing value chain transparency, adhering to regulations and compliance requirements such as export controls, battery passports and warranties, predicting energy production, network maintenance and predictive maintenance, to monitoring battery performance – AI and data centers serve to improve energy production improve. and optimizing greener technologies.
However, the required infrastructure for data centers and AI training can also be carbon intensive, and alternative fuels are actively being explored to decarbonize this space.
Ultimately, vertical collaboration is needed with organizations in mining, processing, manufacturing and recycling to improve understanding of demand, supply and carbon tax requirements, to decarbonize and achieve a successful green transition.
As geopolitical factors remain both barriers and motivators, they must be tempered to enrich unfettered knowledge exchange and accelerate product development by working with countries like China, which began its green transition decades earlier.
Because much of clean technology relies on Chinese manufacturing capabilities, government-imposed tariffs and sanctions only serve to delay and complicate the path to net zero.
For the mining sector, decarbonization and greater operational efficiency at a time of increased capacity can deliver significant benefits. However, as technologies are still evolving, especially in the area of fleet electrification, it may take some time before companies see a return on their initial investment.
Regardless of costs, the ambition of operators and OEMs is clear, and the competition to decarbonise is energizing the mining sector towards a new era of change. With many examples of successful collaborations emerging, there is no doubt that the industry can achieve a greener and cleaner working environment.
About the author: Sheena Patel is director and EV sector specialist at Vendigital.
“Increasing capacity and achieving decarbonization targets – is that possible?” was originally created and published by Mining Technology, a brand owned by GlobalData.
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