A ustralian mining companies are coming out of a challenging year, with revenue down 10% on average for the top 50 operators in the country, and margins dropping from 50% to 34% due to lower commodity prices across most minerals. While analysts maintain their positive outlook for the sector, and especially for critical minerals, reduced cashflow is making investment decisions more difficult – particularly sustainability investments, which tend to offer lower short-term returns. “Currently, mines are finding it hard to secure the necessary capital needed for decarbonisation. Electric fleets require significant investment in batteries and electrical distribution infrastructure, which are capital intensive, presenting a real challenge,” says Siobhan Cribb, Founder of decarbonisation consultancy Connect Zero. Even when the business case can be proven, external circumstances can lead to the cancellation of decarbonisation projects. Case in point: in 2024, IGO published a white paper based on a pre-feasibility study for the full electrification of its Cosmos nickel mine, which found that electric fleets would be “competitive with diesel vehicles” on a net present cost basis. But just a few months later, the mine was put under care and maintenance. Chris Carr, IGO’s Head of Technical Services, explains what happened to Energy and Mines: “We thought that Cosmos would be a 10,15-year mine, and we were going to electrify that underground and on the surface. Unfortunately, the rapid changes in the nickel market combined with some technical challenges with the mine meant we had to close the mine pending a review of our options.” GREEN PREMIUMS ARE STILL FAR FROM A REALITY Tightened market conditions are making sustainability initiatives more difficult to justify – especially because decarbonised minerals are still a long way from yielding a ‘green premium’. “You’ve seen the Australian nickel industry, for instance, suffer massively in competition with production out of Indonesia, which is certainly not green nickel as such. So does meeting a higher sustainability standard for Australian mining produce
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a premium? At present, I doubt it,” states Neil Foster, Chief Sustainability & Risk Officer at De Grey Mining.
He notes that environmental, social and governance (ESG) priorities remain front of mind for the sector, which already has to comply with a range of standards, the Safeguard Mechanism, and are now mandated to report on their sustainability impacts: “You cannot get an approval for a mine if you haven’t turned your mind to what the decarbonisation pathway looks like.” But financial imperatives are simply stronger. In this context, miners are focusing on the ‘low- hanging fruit’ of decarbonisation – namely lower-emissions power supply, but even there, Foster suggests miners must plan for future fleet electrification: “Do you want to go with a short contract whereby you’ll look to switch to a new supplier when you seek electric vehicles, or do you opt for a longer- term contract whereby you can have a supplier who will invest in a longer-term relationship to seek to start bringing that electrification with you”. He believes that “the maturity of the cost curves associated with battery technology, trolley assist and the like will accelerate quicker than most people, including ourselves, predict”. IMPROVING THE BUSINESS CASE FOR ELECTRIFICATION The business case for electrified fleets is already close to parity with diesel-powered vehicles, particularly for underground mines. IGO’s pre-feasibility study is evidence of that, even though Carr warns that “every case is individual” and depends on mine depth, refrigeration needs, etc.
ELECTRIC FLEETS TO DELIVER UP TO 30% OPERATING COST REDUCTION Brian Boitano, Executive General Manager, Sales, Marketing, Training and Solutions for Mining at Liebherr Australia, explains how his company and Fortescue managed to make the business case for such an ambitious transition viable. “It’s important to note that for any industry, when you’re in the early stages of this kind of development, the economics are always upside down: the marginal cost of production of early units and operating are significantly higher than for conventional equipment. “As it concerns ourselves and Fortescue, we will be offering a total cost of ownership product that is at parity with and below the cost over time of that of a conventional internal combustion engine-driven diesel machine,” he says. While the operating cost will remain high for a period of time, Liebherr expects it to decline over time – without any government subsidies – driven by the
In his mind, the game changer will be ultra-fast charging, an emerging technology allowing electric mining vehicles to be recharged in a matter of minutes instead of hours, which will eliminate much of the limitations in EV decline trucking. “I think that is where we’ll find success. So you could pull into a bay, recharge your battery in five minutes and then keep going.” Ultra-fast charging technology is being trialled by suppliers including Switch Technologies, as well as miners themselves, in collaboration with their OEMs. One such collaboration is that of Fortescue and Liebherr, who jointly unveiled a new 6 MW fast charger that can charge a haul truck’s 1,900 kWh battery in less than thirty minutes last October. The partnership also involves the delivery of 55 electric excavators, more than 350 large trucks, including diesel-powered trucks to be repowered with batteries and battery-electric trucks and around 60 battery- electric dozers to Fortescue’s Pilbara mine sites – all open pit iron ore operations – by 2030.
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