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Australian miners accelerate green investment amid net-zero flurry

13th August 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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With the rise of environmental activism and greater investor interest in environmental and social governance, Australian miners and the Australian government have started to give greater priority to emission-reduction schemes and environmental investments.

The federal government in 2020 announced a A$1.9-billion investment in a new energy technology package, which will entail establishing Australia’s first regional hydrogen export hub, a King Review Co-Investment Fund, a carbon capture and storage (CCS) Deployment Fund and a Future Fuels Fund to support new and emerging technologies, as part of its greater efforts to reduce emissions nation-wide.

“Getting the technologies of the future right will support 130 000 jobs by 2030, and avoid in the order of 250-million tonnes of emissions in Australia by 2040,” Minister for Energy and Emissions Reduction Angus Taylor has said.

“If these technologies achieve widespread deployment globally, they will significantly reduce emissions from energy, transport, agriculture and heavy industry. These sectors account for 90% of global emissions and emit 45-billion tonnes each year.

“The government expects to invest more than A$18-billion in low emissions technologies over the decade to 2030, in order to drive at least A$50-billion of new investment over the next ten years."

A Low Emissions Technology Statement was released, outlining five priority technology and economic stretch goals to make new technologies as cost effective as technologies.

These goals included producing hydrogen at less than A$2/kg, dispatching long duration energy storage at less than A$100/MWh, achieving low emissions steel production at under A$900/t and low emissions alumium at under A$2 700/t, achieving CCS and carbon dioxide compression, hub transport and storage at under A$20/t of carbon dioixide, and achieving soil carbon measures under A$3 per hectare per year, or at 90%.

Hydrogen is a key priority under the federal government’s Technology Investment Roadmap, with the government having invested more than A$1-billion to support Australia’s clean hydrogen industry, including A$275.5-million in the 2021-22 Budget to support the development of regional hydrogen hubs.

The government has also entered into partnerships with Germany, Singapore and Japan to accelerate the development of low emissions technologies, including hydrogen, that will drive investment and job creation in Australia.

In May this year, the federal government also made good on its low emissions aluminium targets, providing A$11.3-million in funding through the Australian Renewable Energy Agency (ARENA) to support a A$28.2-million trial by aluminium major Alcoa Australia to investigate using renewable energy to process bauxite into alumina.

Alcoa Australia will trial mechanical vapour compression (MVR) technology to electrify the production of steam and heat at its Wagerup plant in Western Australia, and if the trial proves feasible, the MVR technology could reduce an alumina refinery’s carbon footprint by up to 70%.

Mining major Rio Tinto has also benefitted from the federal government’s environmental drive, receiving A$579 786 in funding to support its own A$1.2-million feasibility study on whether hydrogen can replace natural gas in alumina refineries to reduce emissions.

“If we can replace fossil fuels with clean hydrogen in the refining process for alumina, this will reduce emissions in the energy and emissions intensive refining stage of the aluminium supply chain. Exploring these new clean energy technologies and methods is a crucial step towards producing green aluminium,” said ARENA CEO Darren Miller.

“If successful, the technical and commercial lessons from Rio Tinto’s study could lead to the implementation of hydrogen calcination technology, not only in Australia, but also internationally.”

Alumina refining accounts for approximately 24% of Australia’s direct, non-electricity, or scope 1 manufacturing emissions, or 14-million tonnes annually.

In July this year, the federal government assigned A$2-million in funding to support the resources sector to accelerate the development and deployment of low emissions technology, with the funding again provided through ARENA, to ClimateWorks Australia to assist in the next phase of the Australian Industry Energy Transitions Initiative (ETI).

A particular focus of the ETI funding would be on the iron-ore and steel industries, the alumina and aluminium industry, the liqufied naturalg as (LNG) sector, and other metals such as lithium, copper and nickel.

"These sectors are key pillars of our economy both as employers of thousands of Australians and significant export earners,” Minister Taylor said.

“Investing in the development and deployment of low emissions technologies today will ensure these important sectors can reduce their carbon footprint while supporting Australia’s economic growth well into the future.”

Companies participating in the ETI includes Rio Tinto, BHP, Woodside, Fortescue and Wesfarmers.

COMPANY CAMPAIGNS

In addition to its hydrogen-in-alumina feasibilty study, Rio has announced a number of global environmental initiatives, including the exploration of solar technology at its Boron borates mine, in California. If successful, the Heliogen technology could be used at Rio’s other operations around the world to supply process heat, which accounted for 14% of scope 1 and 2 emissions from the group’s managed operations in 2020.

The miner has also joined forces with Alcoa to develop and deploy inert anode technology, which eliminates all direct greenhouse gases (GHGs) from the traditional smelting process and instead produces oxygen.

Construction has started on the first commercial-scale prototype cells for this technology at Rio’s Alma smelter, in Quebec.

Additionally, the company has also partnered with metals and mining company Schneider Electric to collaborate on the development of a circular and sustainable market ecosystem for both companies and their customers.

This multi-product partnership will see Schneider Electric use responsibly sourced materials produced by Rio, including low-carbon aluminium and copper produced with renewable power, iron ore, and borates. Rio for its part will use energy and industrial services from Schneider Electric, as the companies work together to develop digital platforms, technologies and solutions to be deployed across the metals and mining supply chain to drive further decarbonisation.

Rio has publiclity stated its target of net zero emissions by 2050.

Fellow diversified miner BHP, which also has 2050 as its targeted date for net zero emissions, has instituted a number of its own environmental initiatives.

The company is aiming to meet the energy needs of its Escondida and Spence copper operations, in Chile, from 100% renewable energy sources from the mid-2020s. The miner is also working on eliminating water draw down from aquifers for operational supply by 2030 in Chile.

BHP has also signed a firm renewable power purchasing agreement (PPA) to meet half of its electricity needs across its Queensland coal mines from low emissions sources, including solar and wind. The agreement will help BHP reduce emissions from electricity use in its Queensland operations by 50% by 2025, based on 2020 levels.

“This is an important step forward in BHP’s transition to more sustainable energy use across our portfolio, and a first for our Australian operations. It will diversify our energy supply, help to reduce our energy costs, and reduce BHP’s Australian scope 2 emissions by 20% from 2020 levels,” said BHP’s minerals Australia president, Edgar Basto.

The company has also signed a renewable PPA to supply up to 50% of its electricity needs at the Kwinana Refinery from Merredin solar farm, the largest in Western Australia. The agreement will help BHP reduce emissions from electricity use at the refinery by up to 50% by 2024, based on 2020 levels.

“Nickel is a future-facing commodity that is essential to creating the high performing lithium ion batteries used in battery electric vehicles (BEV). Consequently, the demand for nickel and especially the nickel produced by Nickel West is set to grow dramatically. The sustainable production of nickel is also essential to meet this future demand as the customers purchasing BEVs want to know that the inputs to the manufacturing of these vehicles are also sustainable,” said Nickel West asset president Eddy Haegel.

“Nickel West is already one of the most sustainable nickel producers in the world but has committed to significantly reduce carbon dioixide emissions further.”

Iron-ore miner Fortescue Metals has probably taken the biggest steps in terms of environmental investments, with the miner setting a target for being carbon neutral by 2030, with the company’s green energy arm Fortescue Future Industries (FFI) expected to lead the way.

FFI was established in 2020, and will invest in renewable energy and green hydrogen projects both in Australia and globally. The company was established with the aim of showing that businesses could lead the way in transitioning away from fossil fuels.


FFI in July this year announced that it had reached all of its initial decarbonisation targets, including developing a ship designed powered by green ammonia and trialing this design at scale, testing large battery technology in its haul trucks along with hydrogen fuel cells for its drill rigs, trialing green ammonia technology for its locomotives and conducting trials to use renewable energy in the Pilbara to convert iron-ore to green iron or at low temperatures and without coal.

Its specialist teams have made ground-breaking progress including the successful combustion of ammonia in a locomotive fuel, with a pathway to achieve completely renewable green fuel, completion of design and construction of a combustion testing device for large marine engines, with pilot test work underway and a pathway to achieve completely renewable green shipping fuel, while also finalising design of a next generation ore carrier that will consume renewable green ammonia, with the Classification Society giving in principle design approval.

Furthermore, FFI has tested battery cells to be used on Fortescue haul trucks, designed and constructed a hydrogen powered haul truck for technology demonstration complete, and designed and constructed a hydrogen powered drill rig for technology demonstration complete, with systems testing for both of these systems under way.

FFI has also successfully produced high purity green iron from Fortescue ores at low temperature in a continuous flow process, and has successfully trialled the use waste from the green iron process with other easily sourced materials, to make green cement.

“Fortescue is delighted by these results. We have been mulling over hydrogen for more than a decade, becoming confident that hydrogen could be stored and transported as a zero-carbon fuel several years ago.,” FFI CEO Julie Shuttleworth said.

"We set out to test the hypothesis that there was sufficient 100% renewable green energy, hydrogen, ammonia and industrial manufacturing potential, for products such as green cement, green fertilizer, green iron and steel, to fully satisfy the world's needs. To do so, Fortescue chairperson, Dr Andrew Forrest led two significant overseas expeditions alongside 50 area experts, spending more time on the road than at home in the last 12 months. As a result, the company has confirmed that hypothesis.

"To demonstrate this within Fortescue, we set ambitious decarbonisation targets for our own heavy industry. These are being driven by FFI’s Green Team, who are aiming to eliminate carbon emissions from our own operations. This work commenced in earnest only several months ago and the results have been immense.”

Fortescue has also spent A$32-million to replace its fleet of diesel-driven coaches with hydrogen-powered vehicles, supported by the installation of a refuelling station, which will harness renewable electricity from the Chichester solar gas hybrid project to generate renewable hydrogen onsite.

LNG producers are also investigating environmentally-friendly alternatives, with Santos and project partner Beach Energy jointly developing the A$210-million Moomba CCS project, in South Australia, to permanently store 1.7-million tonnes of carbon dioxide per year with capacity for up to 20-million tonnes annually across the Cooper basin.

Santos CEO and MD Kevin Gallagher said the project will also be one of the lowest-cost projects in the world at A$25/t to A$30/t, driving towards the Australian government’s stretch goal to compress, transport and store carbon dioxide for less than A$20/t.

Santos was awarded a A$15-million grant from the federal government to assist with this project.

Meanwhile, Woodside is looking at solar energy to power its Pluto LNG facility, in Western Australia. The company is investigating the supply of some 50 MW of solar energy from the proposed power project, which would comprise more than 210 000 solar panels, making it one of the largest in Western Australia.

The company has undertaken a range of environmental, geotechnical and engineering studies and is progressing key stakeholder consultations ahead of seeking regulatory approvals for the power project.

Woodside and multi-national group Perdamen will also evaluate the supply of a further 50 MW of solar power from the Woodside power project to Perdaman’s proposed urea facility.

Perdaman estimated that incorporating solar power could reduce its fuel gas consumption by some 50% while reducing emissions by at least 200 000 t/y of carbon dioxide equivalent over 20 years. The initiative would also allow Perdaman to increase produciton of ammonia, which produces zero emissions at the point of use.

A number of miners have also taken to installing renewable energy sources directly at their mines, with gold miner Gold Fields employing the world’s largest renewable microgrid at its Granny Smith gold mine, in Western Australia.

The hybrid power system, which has been integrated with an existing gas fired power station, is powered by more than 20 000 solar panels and supported by a 2 MW/1 MWh battery system.

The solar, thermal and battery storage assets will produce around 18 GWh of energy every year, with carbon emissions at the mine expected to be reduced by approximately 9 500 t of CO2-equivalent, and once fully operational, will reduce the mine’s fuel consumption by 10% to 13%.

At Gruyere, Gold Fields and its joint venture partner Gold Road Resources are also installing a renewable energy hybrid microgrid to increase the mine’s power capacity by 45% to enable plant throughput to reach 10-million tonnes a year.

The microgrid is expected to reduce carbon emissions by some 16 000 t/y of CO2 equivalent, and would generate power supply savings of some 5%, at current gas market prices.

Gold major Newcrest Mining is also developing GHG plans for each of its operations, and is looking to secure renewable energy sources for its operations. At its Cadia operation, in New South Wales, the miner is hoping to harness wind energy, with a wind farm being built to generate more than 40% of the mine’s energy requirements.

Fellow listed Kirkland Lake Gold investing $75-million a year for the next five years in environmental technology centres aimed at further reducing its carbon footprint through technology and innovation, while methane captured at Anglo American’s Moranbah North, Grosvenor and Capcoal underground metallurgical coal mines is being used by nearby power stations to generate more than 140 MW/y of electricity, or enough to power 90 000 homes.

AngloGold Ashanti is upgrading its current diesel haul fleet at its Tropicana gold mine by trialling a fleet of six new electric haul trucks to reduce diesel consumption, while gold miner Newmont Mining is investing $500-million in climate change initiatives.

A progress report by the Minerals Council of Australia into a 2020 Climate Action Plan has shown that well over three-quarters of its surveyed members had aims to reach net zero emissions by 2050, and showed that the resources industry was committed to developing the technologies and processes necessary for decarbonisation and identifying the necessary investments and pathways to reduce emissions.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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