Grid, cost and availability concerns paramount in mining electrification

As some mining companies work on moving away from natural gas or other fossil-fuel power generation along with on-site diesel vehicles, they are confronting steep up-front costs, limited grid availability and a lack of commercially viable electric vehicle technology, mining representatives said during the Energy and Mines Toronto Summit on Nov. 28-29.

Electrification is a key element of many miners' decarbonization plans since emissions from fossil fuel-based power and internal combustion engines usually contribute a major portion of a given project's carbon emissions, experts said during the event. Although miners' electrification push is buoyed by increasing consumer demand for lower-carbon metals, experts said electrification expansion remains limited by factors including inadequate government funds for infrastructure.

"We can electrify everything tomorrow, but the source, the electricity, needs to be available," Renaud Adams, president and CEO of Canada-based gold miner Iamgold Corp., said during a Nov. 28 panel. "I know we're up to this challenge and we're going to face it, but the infrastructure that needs to follow is a huge challenge as well."

Supporting the grid

Operational and fleet electrification is a core tenet of many miners' net-zero plans, especially for producers currently relying on diesel-powered haulage vehicles and fossil fuel-powered electricity, multiple mining representatives said at the event.

"For our global business, as well as the mining sector more broadly, electrification is a game-changer," Simon Thomas, vice president for potash at diversified miner BHP Group Ltd., said during a Nov. 28 keynote address at the event. "It offers the opportunity to drastically reduce greenhouse gas emissions and the exposure to diesel underground, and provides a key technical foundation for the automation of mining equipment."

However, the cost of electrification upgrades is unevenly split, especially regarding funding the power or grid upgrades needed to support electrification.

"In Canada, you have this [decarbonization] opportunity ... you stop burning fuel eventually and [it is] replaced by cheap power that is available," Iamgold's Adams said. But the company also owns the Essakane gold mine in West Africa. "In Burkina Faso, it's a different reality; we do have solar panels there, but it still costs 15 cents per kilowatt. ... It's doing the right thing, but at the end of the day, there is a financial cost."

BHP's Thomas identified a need for government support in mine site electrification, including at the company's preproduction-stage Jansen potash project in Canada.

"Achieving carbon-neutral electricity at Jansen will take innovation and collaboration across a number of partners; we can't do this on our own," Thomas said.

Overcoming tech hurdles

Miners looking to electrify their fleets and equipment manufacturers seeking to produce electric versions of the large haulage vehicles used at mine sites are facing an uncertain timeline for the phase-in of new electric technologies, experts said.

Part of the hurdle is making EVs cost-competitive with the diesel fleets used at mines for decades.

"Diesel has spoiled us for 100 years, and we've optimized it down to the fractions of fractions," Peter Wan, manager for mobile fleet decarbonization at diversified miner Teck Resources Ltd., said during a Nov. 28 panel.

Similarly optimized battery EVs are often scarce, making it difficult for miners to go all-in on fleet electrification.

"The reality is, there's not a commercially available [battery electric] haulage solution today," Jason Bowsher, life cycle and decarbonization manager at diversified miner Freeport-McMoRan Inc., said during a Nov. 28 presentation.

With no successful demonstration of at-scale fleet electrification to date, mining companies may be hesitant to be first in the electrification line, experts told S&P Global Commodity Insights during the event.

Although fully electric vehicles may be the end goal for miners and manufacturers, the sector could embrace lower-carbon, non-battery EVs during the decarbonization transition period preceding the deadlines for net-zero goals.

"Battery electric tends to be where we're headed based on the economics of the situation as well as the technology readiness, but hybrid [vehicles] are certainly something that we are also working on, as well as fuel cells for further down the road or [for] specific applications," Denise Johnson, group president of equipment manufacturer Caterpillar Inc., said during a Nov. 28 panel.

Miners facing cost, infrastructure or technology hurdles with fleet electrification may also turn to alternative fuels such as hydrogen to power haulage vehicles, speakers said.

"Certain mines are saying, 'Electrification isn't for us because our grid isn't stable, so we need something like an internal combustion engine, for example, that runs on an alternate fuel'," Teck's Wan said. "We have to be sensitive that one size will not fit all."

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