HomeBusinessIncreasing capacity and achieving decarbonization goals – is it possible?

Increasing capacity and achieving decarbonization goals – is it possible?

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.

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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.

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