In the arid land of remote Western Australia, plans are underway to build a zero-carbon new mine.
- Miners have been ramping up plans to cut their carbon emissions in the lead up to COP26
- Some, like FMG, are creating completely new revenue streams
- Lobby groups want more action, sooner, on “scope 3” emissions
Mining company Oz Minerals wants its next project, West Musgrave, to be carbon neutral.
“It does require a complete rethink of how you design a new mine,” Oz Minerals chief executive officer Andrew Cole told The Business.
“I think it’s something that we all need to do for the greater good of the planet, and not just by offsetting credits to get to net zero, but actually addressing the root cause to get you to zero.”
If all goes to plan, the copper-nickel project will be powered by a 100 per cent renewable on-site power plant and will feature a zero-emissions mining fleet.
Copper and nickel are both essential components needed to decarbonise the globe.
Nickel is a critical element used in batteries, while copper is essential to the transmission of power.
“We think that product will end up in energy storage systems, in renewable vehicles for example, that are then marketed as clean, green products for consumers.
“That’s the value chain we’re working to actually enter.”
Oz Minerals is also working to cut carbon emissions at its existing mines.
“It’s difficult to retrofit existing operations with some of the technology that you need to actually make this journey,” Mr Cole said.
But, he added, while it’s not as easy as starting from scratch, they’re making changes, like building a renewable energy-powered 1,300-metre vertical hoisting shaft to bring up ore from deep underground at their Prominent Hill copper and gold mine in South Australia.
That will cut Prominent Hill’s carbon emissions by about 25 per cent.
Miners eye green hydrogen
Other mining companies are also reinventing their business models.
When Fortescue Metals Group (FMG) chairman Andrew Forrest started the company in 2003, his aim was to create another major iron ore miner.
FMG is now Australia’s third largest iron ore producer, digging 182 million tonnes out of its Pilbara mines last financial year.
He is now reimagining the business, with the creation of subsidiary company, Fortescue Future Industries (FFI), which plans to produce 15 million tonnes of green hydrogen by 2030 and to grow that to 50 million tonnes a decade later.
“Green hydrogen is the fastest pathway to decarbonise those hard-to-abate sectors, such as industrial shipping and heavy haulage,” explained FFI chief executive officer Julie Shuttleworth.
“There are many other types of hydrogen that use fossil fuels and release carbon dioxide [and] methane into the atmosphere, and they actually don’t help eliminate global warming.”
FMG uses about 1 billion litres of diesel a year in its Pilbara mining operations.
It wants to replace that with green hydrogen and has built its first hydrogen-fuelled heavy haulage truck prototype at its FFI facilities in Perth.
But it’s not stopping at fulfilling its own needs.
“This starts with our own operations, where we are the demand for green hydrogen, green electricity and green ammonia, and we will also be the supplier into that. Then we will leverage off our learnings from that into all these other projects that we’re doing,” Ms Shuttleworth explained.
“We’ve got the technology, we’ve got the people, we’re starting manufacturing, we’ve got the design of all these projects happening right now.
“There’s a huge export opportunity with green hydrogen.
“This is a crazy target, there’s no doubt about that, but we do have a pathway.”
Energy producer Woodside is also hoping to make green hydrogen a commercial reality.
It has just signed a deal with the Western Australian government to build a $1 billion hydrogen and ammonia production facility at Perth’s southern industrial precinct, Kwinana.
Named H2Perth, the project hopes to generate up to 1,500 tonnes a day of hydrogen to export in the form of ammonia and liquid hydrogen by the second half this decade.
Woodside’s chief executive officer Meg O’Neill also plans to work with the government to build refueling stations around the state to develop local demand for the greener energy resource.
“We intend to use our skills and financial strength to add new energy products and lower-carbon technologies and services to our portfolio, which can be scaled to meet customer demand,” she said at the project announcement last month.
The shift comes about two months after Woodside announced it was buying all of BHP’s oil and gas business.
It was a move that was described by investor lobby group the Australasian Centre for Corporate Responsibility at the time as “a disastrous outcome for Woodside shareholders and the climate”.
BHP is targeting net zero operational greenhouse gas emissions by 2050, with a mid-term reduction target of cutting emissions by 30 per cent, based on last year’s levels, by 2030.
It wants to reach net zero on its scope 3 emissions — the emissions caused by customers — by 2050.
“In the past year, we have entered into research and development partnerships with companies covering 10 per cent of the world’s steel production, to assist steelmaking decarbonisation efforts,” chief executive officer Mike Henry told shareholders during its recent London AGM.
“We undertook the world’s very first LNG-fuelled bulk carrier tender, which will lower emissions of shipping our iron ore, and have subsequently set a target of net zero emissions from the maritime transport of our products by 2050.”
More than 80 per cent of shareholders at that meeting voted in support of BHP’s climate change roadmap.
Shareholders in the UK-based stock exchange account for 42 per cent of the overall register split between London and Sydney.
Shareholders who own ASX-listed shares will vote on the matter at its AGM here later this month.
‘Open up avenues that we don’t even know exist’
Last month, the world’s largest iron ore producer Rio Tinto announced it was cutting its scope 1 and 2 carbon emissions by 50 per cent (on 2018 levels) by the end of this decade – more than tripling its previous target.
“The world needs to decarbonise and we want to play a substantial role in that,” Rio Tinto Iron Ore chief executive Simon Trott told The Business.
Rio Tinto produces 3 to 4 million tonnes of carbon dioxide emissions from its Pilbara operations every year.
More than 1 million tonnes comes from gas-generated power, and the remainder from diesel emitted by its mine machinery and trains that transport iron ore from its 16 mines to its port in Karratha.
“We’re working with our partners, Caterpillar, Komatsu, to really develop the technology so that we can replace diesel trucks, probably with battery technologies, but potentially hydrogen as well,” Mr Trott said.
It’s also working towards full electrification of the autonomous trains that run on its 1,700-kilometre rail network.
“We’ve announced that we won’t buy any diesel heavy mobile equipment from 2030, and so I think you’ll see the technology developing at a rapid pace to begin to replace within that time period.”
But Mr Trott says the company won’t be able to reach its targets alone.
“We’re partnering with our suppliers, for example, in some areas, we’re partnering with governments and we’re also partnering with our customers, because we don’t have all the answers.”
Rio will spend $10 billion between now and the end of the decade to further develop technologies to decarbonise its Australian iron ore and aluminium operations, including developing solar and wind power generation.
Mr Trott said that what was once potentially uneconomical is now not just smart for the environment, but smart business too.
“As we look to putting the first gigawatt into the Pilbara, we’re going to do that in a way that we can upscale it, both to replace our emissions of our diesel heavy mobile equipment, but potentially, there are opportunities to go further downstream, for example, the production of metallics, and that’s certainly something that we’re looking at as well.
“I think if you look forward 10, 15, 20 years, this is going to open up avenues that we don’t even know exist.”
Don’t forget scope 3 emissions
Lobby groups like the Australasian Centre for Corporate Responsibility (ACCR) have welcomed the commitments made by companies to decarbonise, but ACCR’s director of climate and environment Dan Gocher wants to see more leadership when it comes to scope 3 emissions.
“The commitments that we’ve seen are to fund research and, you know, memorandums of understanding with particular Chinese universities,” Mr Gocher said.
“But we’d like to see them throw significantly more capital at reducing those emissions from steelmaking.”
BHP is pursuing net zero scope 3 greenhouse gas emissions by 2050 and will also require the shippers of its products and suppliers of goods and services to achieve net zero by 2050.
Rio Tinto has some incremental targets like reducing shipping emissions by 40 per cent by 2030 and carbon intensity from steelmaking by 30 per cent by 2030, and it has the same 2050 target for net zero for its scope 3 emissions.
FMG has the most ambitious scope 3 target of the three, hoping to reach net zero by 2040.
“Commodities like iron ore, copper, nickel, lithium, these are the commodities that will help drive the transition, so we want to see investment in those quantities, but that investment should be at very low or near zero emissions in the short to medium term,” Mr Gocher said.
“We’re in a crisis, a climate crisis, and we need our largest emitting companies, particularly BHP and Rio Tinto, to really step up and lead the transition.
“And that means setting really ambitious climate targets.”