Australia’s Mining Industry: A Key Player in the Global Decarbonisation Effort
In order for Australia to reach its goal of net-zero emissions by 2050, mining is poised to play a critical role, with mining executives and CEOs under growing pressure to decarbonise. Australia’s mining industry is also being increasingly impacted by the effects of climate change. According to meteorologists, extreme weather events such as floods, heatwaves, and rising sea levels will continue to pose significant risks to the health and safety of workers, making it harder to carry out mining operations.
Reducing greenhouse gas emissions and mitigating the risks of climate change are the two primary drivers of decarbonisation in the mining industry.
According to McKinsey & Company, the global mining industry accounts for a significant portion of greenhouse gas emissions, estimated to be between 1.9 and 5.1 gigatons of CO2 equivalent annually. Underground coal mining operations are the largest source of these emissions due to the release of fugitive coal-bed methane, accounting for between 1.5 to 4.6 gigatons of emissions, with Australia accounting for 12% of all black & brown coal mined globally.
To reduce greenhouse gas emissions and mitigate the risks of climate change, with the global goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, the mining sector needs to take a leading role in decarbonising the economy. Achieving this goal will require rapid decarbonisation across the economy, transitioning towards cleaner energy solutions and adopting sustainable practices across all sectors.
Mining – the problem and solution to decarbonisation
Although the mining industry is one of the economy’s biggest contributors to greenhouse gasses, it’s also a key part of the solution. By providing the raw materials needed for the production of renewable energy and other industrial technologies, mining is critical to the decarbonisation effort.
Mining is essential for the production of solar panels, wind turbines, and batteries, all of which are crucial components of renewable energy systems. These technologies require materials such as silicon, aluminum, copper, silver, steel, lithium, cobalt, nickel and rare earth elements. 2020 Research from Australia’s Identified Mineral Resources shows Australia is a top five producer for antimony (1%), cobalt (4%), ilmenite (9%), magnesite (3%), manganese ore (12%), rare earths (8%) and zircon (21%). The country’s critical minerals sector is rapidly expanding to meet the increasing global demand for secure and strategic mineral supplies, which brings with it employment and economic development.
Mining is also a large user of renewable energy, whether through behind the meter solutions or underpinning large renewable energy developments through energy offtake agreements. Mumford Commercial Consulting (MCC) has assisted many mining companies with understanding their options and delivering their clean energy solutions, including 29 Metals and Oz Minerals.
As well as providing the raw materials needed for renewable energy technologies, the industry contributes to decarbonisation through increasing energy efficiency and reducing operational emissions. For example, mining companies can adopt energy-efficient practices, such as optimising mine ventilation or simply reducing waste in their operations. The growing interest and application of hydrogen based solutions will also play a critical early role in decarbonising hard to abate sectors of the economy such as manufacturing green steel and other uses of furnace heat for processing.
However, finding the right balance between the cost of decarbonisation and the cost of producing the metals and minerals needed to achieve decarbonisation is a significant challenge. The industry must continue to invest in research and development to find innovative ways to reduce emissions and improve sustainability while meeting the growing demand for these critical materials. Initiatives such as the HILT CRC will be critical in navigating the forward path.
Mining and the circular economy
Mining has an important role to play in Australia’s move towards a circular economy. By adopting a circular approach, mining companies can reduce waste and make the most of their resources by recovering valuable minerals and materials from waste streams, and reusing them in production. This not only helps to reduce the need for new materials, but also has a positive impact on the environment.
Large mining companies like BHP and Rio Tinto are already on board with this approach. For instance, BHP has set up a recycling company to give new life to used truck tires, using them to produce oils, carbon black, syngas, and steel. Similarly, MCC has undertaken feasibility assessments of tyre and waste recycling operations for clients that produce value adding products such as hydrogen and carbon black, including solutions that deliver negative greenhouse gas emission outcomes.
In early 2022, Fortescue Future Industries (FFI) entered into a Memorandum of Understanding (MOU) to supply up to 100,000 tonnes of green hydrogen to Covestro, a high-tech polymer circular economy supplier based in Germany. FFI are also working on recycling wastewater and reducing packaging waste, as well as finding ways to reuse and recycle mining equipment and materials. These are just some of the many ways the company is exploring to reduce waste and make the most of resources.
Advancing sustainability through technology
Both significant challenges and exciting opportunities are on the horizon for mines that decarbonising. One of the biggest opportunities is in using new technology to make mining more sustainable. By investing in automation and digital tools, mines can become more efficient and reduce their environmental impact at the same time.
Use of non-traditional renewable energy solutions using energy storage vectors such as air, water and gravity (eg. Economical Energy), use of hydrogen and use of small modular nuclear reactors will all play their part. It is particularly important for the mining industry to focus on fit for purpose and site specific solutions rather than a one size fits all approach.
Another way to reduce greenhouse gas emissions is carbon capture and storage (CSS). This technique captures carbon dioxide emissions from industrial processes and stores them underground, which helps keep them from contributing to global warming. Several CSS projects are already underway in Australia, including the Gorgon Gas Project on Barrow Island, and the Moomba Carbon Capture and Storage Project.
The role of Government and regulators
When it comes to creating a cleaner and greener future for mining in Australia, government policy and regulations play a huge role. By establishing appropriate regulations the government can help facilitate the transition towards a more sustainable and low-carbon mining sector.
Using policy measures such as grants, carbon pricing and emissions targets, governments can financially encourage companies to reduce their greenhouse gas emissions in line with the goals expected by the broader community.
Reporting transparency and accountability to ensure that companies comply with environmental and social standards is also important, and regulatory bodies such as ASIC, ACCC and APRA will need to play their part to ensure stakeholders have access to relevant information and the industry complies with their obligations.
Decarbonisation – an opportunity for the mining sector
Any mining company that wants to stay competitive in the global economy and reduce their work & operations risks should be prioritising decarbonisation. Stakeholder pressure on the industry shouldn’t discourage companies from taking action.
As we all work towards achieving our emission reduction goals, mining will remain a vital contributor of the materials necessary to decarbonise our global economy. If you need guidance on your decarbonisation journey or to get clear on your strategy, reach out to MCC today.