Mission possible: navigating decarbonization strategies for mining

At the annual IMARC mining conference in Australia, Tom Harper took part in frank discussions about reducing emissions in the sector. 

The landscape for mining operators is more challenging – and exciting – than ever before. The sector deals with the dual imperatives of increasing production to supply critical minerals for the energy transition, while it works at the same time to decarbonize its own operations. 

As ever, technology is key to help improve both mining production and emissions abatement, yet there are many moving parts.

At the recent International Mining and Resources Conference (IMARC) in Sydney, Australia, Tom Harper, VP of Commercial Development and Enterprise Customer Solutions, Baker Hughes, joined a panel discussion around decarbonization strategies for mining. 

In his post on LinkedIn, Harper summed up the challenge for the mining sector: “The demand projections for certain minerals are eye watering, and operators are having to go deeper with lower-grade reserves to service demand,” he wrote. “In parallel, the push to decarbonize operations is a factor in all future decisions. These are complex dynamics that won't be addressed without innovation, new commercial models and collaboration across industries.”

Baker Hughes has been operating across the sector for several years and is increasingly being brought into discussions as innovation and decarbonization are required. The company made its debut at the influential IMARC conference, and Harper commented “It’s essential to get a first-hand feel for the priorities and challenges to be addressed”.

The panel discussion Harper joined to discuss a range of decarbonization strategies for mining leaned heavily into technology and the need for demand to unlock the economics to support ongoing R&D and production.

Harper acknowledged that improving efficiency is a logical first step many industries are taking, stating that “finding efficiencies is not just a way of saving emissions, it’s a prudent way of running your business.”

However, as with his fellow panelists, Harper was eager to point out that efficiencies are only the beginning.

“You can’t ‘efficiency’ everything – there are some really hard-to-abate emissions,” he said. “This is where I think the mining sector has a unique way forward by the sheer scale of demand that it can provide, that can unlock the economics for a range of new technologies” explained Harper. 

Demand on the ground

“For Baker Hughes as a technology provider one of the challenges is that there are lots of ambitions but absent that scale of demand it is sometimes really difficult to support customers and get the viability of projects off the ground,” Harper added. “I applaud Fortescue for their moves here.” 

His fellow panellist Katie Valentine, Head of Decarbonization Integration and Execution at Australian iron-ore giant Fortescue had just shared some of the ways her company is tackling their very ambitious mission to reach Real Net Zero by 2030 without using offsets. “It’s possibly Mission Impossible, or at least Mission Very Difficult,” said panel moderator Janine Barrow, Global Solutions Director of Sustainability, Resilience & Climate Response at engineering consultancy Jacobs.

“As it’s my job to oversee the integrated program schedule, I can confirm that it’s definitely Mission Possible,” said Valentine. “We’ve probably got one of the most ambitious heavy industrial decarbonization programs in the world. By 2030, we would be burning over 700 million liters of diesel a year and adding over 3 million tons of carbon into the atmosphere. Through our decarbonisation plans, we will eliminate all fossil fuels in our operations.”  

Valentine told the panel that to achieve Real Net Zero Fortescue will build 2GW of wind and solar, install 4-5GW hours of battery storage, replace more than 700 units of heavy mobile diesel-powered equipment, build 750km of transmission lines and roll out electrical infrastructure across all sites, including 6MW fast chargers to charge Fortescue’s electric haul trucks in 30 minutes. 

“We’re also doing a lot of work on green systems, which you need to plan and manage operations in an energy-constrained world,” said Valentine. She detailed some recent announcements from Fortescue, including a $2.8 billion green equipment partnership with Liebherr. “If you are credible about getting somewhere by 2030, you have to have plans in place and be doing things right away.”

The power of scale

Harper said such big-ticket partnerships are key to advancing the range of technologies that will help the mining sector to decarbonize. “I keep coming back to that scale component,” he explained. 

Technology companies working to help diverse industries to decarbonize find that key solutions have to be tailored, which makes the economics more challenging. 

“The level of demand that mining can provide for huge-scale electrification underpins every single one of those pathways and the way in which you’ll decarbonize, regardless of whether it's hydrogen or a battery electric truck,” said Harper. “With that centralized demand, the mining sector has a commercial lever that very few have.” 

Harper said capitalizing on this will require a fresh approach to procurement and partnering. “If the industry can get comfortable with slightly different procurement and partnering regimes there’s a really interesting opportunity for mining to be at the forefront” he said. “Everyone talks about collaboration, and it comes down to how you procure, how you balance risk, and how you will adapt to models. It’s the commercials at this scale that will help make the technology development viable.”

Subsidies, certainty and support will accelerate the energy transition

Regulatory certainty – or lack thereof – is another enduring challenge for industrial decarbonization.

“A large percentage of the Western world has gone through an election this year and political uncertainty is not easy when you’re making long-term investments,” said Harper. “I come back again to how we all need to operate. What collaboration means is a change in the balance of risk, a change in the way services are procured, and a change in the way we partner – and then working with regulators.”

Harper acknowledged that there’s “no quick fix” to improve regulatory certainty, but he outlined his vision for a better way forward, especially for major projects with multiple partners. “They require transformation, they require subsidy, and certainty,” he said. “Long-term planning around the regulatory support mechanisms give everybody the ability to walk step by step, together.”

“I come back to the model that Fortescue is executing," he said. “Capital is global, and there are a lot of industries trying to decarbonize. It is so important to get a firm demand signal when a service company allocates R&D dollars to customize programs to work with mining companies and go to regulators to secure these projects. These are big investments, and the mining sector has a unique position where it can give visibility to end demand.”

Harper clarified that he wasn’t talking about contracts being signed on day one. “But it’s a signal that you’re all in it together with a view to how you can get there in partnership,” he said. “It can accelerate decarbonization far faster than other sectors that just don't have the economic scale that unfortunately impedes the viability of a lot of projects. When there is a route to the scale, that justifies the investment.”