Austin Engineering's Ultima truck at Rio Tinto's Paraburdoo iron ore mine in Western Australia. Mining companies spent US$119 billion on mining gear in 2019, and that figure is expected to grow. Source: Austin Engineering Ltd.

Australia's largest mining companies are showing a heightened urgency to lower their greenhouse gas emissions and reduce their waste by pressing local suppliers to scrap old equipment and lower the carbon footprint of their trucks.

Rio Tinto Group, BHP Group and Fortescue Metals Group Ltd. are scrutinizing the carbon footprint of their suppliers' equipment as part of their own environmental, social and governance accountability. Miners have made progress in reducing their global share of emissions to 2.8% in 2020, down from 3.4% in 2016, but the companies face intense pressure from customers and investors to shrink their carbon footprints and improve their sustainability.

"We've seen a heightened demand for mining companies wanting to 'close the loop' of their assets as part of their supply agreements with companies like us," Matthew Perry said in an interview. Perry is Schlam Group's technical support manager for Australia's west coast, which supplies most of the world's iron ore.

More scrap, less junk

Mining companies spent US$119 billion on mining gear in 2019 and that figure is expected to grow through the decade, according to research firm Grand View Research. The equipment uses iron, steel and rubber that could be recycled when it reaches the end of its operational life. Companies have scrapped some of their old equipment for 25 years, but some has been left to languish on site.

"In the Pilbara, there are a lot of old truck bodies sitting around on mines where it's uneconomic to do anything with them," said David Singleton, CEO of equipment supplier Austin Engineering Ltd. "And we're looking at economic and engineering solutions for that."

Austin Engineering has partnered with Rio Tinto to solve the problems of recycling old trucks.

"It's quite unsafe cutting truck bodies up as they have a lot of stored energy," Singleton said in an interview. "If someone goes inside the truck and starts cutting it with a thermal lance, you can get a lot of spring in the steel which has caused fatalities in the past."

Austin Engineering has completed work on breaking up the enormous 12-meter-long by 8-meter-wide truck bodies into flat-pack units for containerized transport as a more efficient way of shipping the metal around the world for melting down and reusing, thus reducing the carbon footprint of the transportation.

The company recently sold its first flat-packed units of truck bodies into Kazakhstan. The melted-down truck body parts are high grade, making them appropriate for any furnace, including the electric arc furnaces that exist in Australia and elsewhere, Singleton said.

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Rio Tinto is open to any idea to improve its recycling program.

"Austin is the main supplier of our truck trays," a Rio Tinto spokesperson told S&P Global Market Intelligence in an email describing the part of the truck that carries the ore. Rio Tinto is "working with a number of partners to find recycling solutions and we are open to new ideas on ways we can better support recycling efforts," they added.

"A big focus for us is working with our iron ore partners on decarbonizing their value chains and building green steel partnerships," the spokesperson said.

BHP, which did not respond to a request for comment, partnered with Schlam to find a way to unload old truck trays.

"Rather than ... having graveyards of truck trays just sitting around, iron ore miners are asking us to come on-site and decommission any of the old trays that are beyond their useful life," Schlam CEO Matt Thomas said in an interview.

Schlam has scrapped about 200 of BHP's dump truck bodies since 2019, which equates to about 7,000 tonnes of steel, Thomas said.

Lighten the load, cut the carbon

BHP also challenged Schlam's engineers in 2021 to build lighter-weight trucks in order to take 400 kilograms out of its standard Hercules-model tray.

Schlam exceeded this by some distance, taking nearly 4 tonnes, or 4,000 kilograms, out of BHP's current version, which increases payload potential and therefore reduces emissions, as less trips are needed to carry the same amount of ore.

"The material efficiency and transport efficiency both contribute to the CO2 savings" because the CO2 used to create the steel is utilized longer, Thomas said.

BHP's request for lower-carbon truck trays is now benefiting other miners, as Fortescue Metals Group Ltd. has put in an order for over 10 such lightweight truck trays. Other tier-one mining companies are also looking at putting in orders for the new design, Thomas said.

Fortescue's mobile assets have an average lifespan of around 10 years, CEO Elizabeth Gaines said in an email.

"In line with our commitment to waste management through prevention, reduction, recycling and reuse, surplus aged equipment [is] either sold via our business disposals process or converted into scrap steel through a third party," Gaines said.