The energy transition will dominate the mining, minerals and metals (MM&M) sector in the coming decades. But it won’t always be smooth sailing. How can operators find the right decarbonisation solutions among emerging technologies and rapidly shifting economics?
The International Energy Agency (IEA) Net Zero Emissions by 2050 scenario shows us where our energy supply will need to come from if we’re to meet the world’s decarbonisation targets.
Today, fossil fuels make up 80% of our energy, with nuclear, hydro and other renewables making up the remaining 20% in roughly equal proportions. However, in 30 years this will flip on its head. Renewables are set to grow in importance, making up 65% of total energy supply, with fossil fuels making up 20%, and nuclear and hydro power 15%.
The knock-on effects of these shifting energy sources will have big consequences for the MM&M sector. So, what will it take to navigate this 30-year journey?
Mining Technology sat down with Jock Armstrong, Principal Consultant at Worley’s Bauxite and Alumina Centre of Excellence in Brisbane, Australia to discuss the challenges facing the MM&M sector as it transitions to net zero by 2050.
Thirty years is a long time. How urgent is the need to meet net zero?
It may sound like a long time, but we have milestones to meet along the way. The decisions we make in the next few years to meet interim goals will affect our trajectory.
Even a good 10-year plan may not be enough. Imagine investing in coal to gas conversion to meet 2030 carbon reduction goals only to see competitors gain an edge through electrification using low-cost renewables, while carbon capture, utilisation and storage (CCUS) for further reduction becomes cost prohibitive. Or imagine that local electricity cost and poor reliability ultimately cause failure for a business that’s already invested heavily in electrification.
It’s easy to envisage both scenarios. The only way to reduce these risks is to think decades ahead, revisiting market and technical analyses periodically to stay on the correct course.
What is the first step to net zero emissions?
Decarbonisation will be the dominant megatrend for the next 20 to 30 years. It will require significant investment in capital and people to effect change at the enormous scale required.
But first, we need to understand the transformation and decarbonisation strategies needed for each asset. For example, its proximity to energy sources, other local industry, communities and existing infrastructure. In some cases, retrofitting of existing assets with carbon capture may be the most economical solution, but in others it may be electrification or conversion to zero carbon fuels.
How do operators choose the best options?
Miners need to think about what the price of different energy sources will be in 10 or 20 years and what role will hydrogen play. They need to look at how long will it take to develop and adapt emerging technologies. And consider if the mine of the future will be based on in-pit processing and what will be the capital cost for decarbonising options.
While there is value in energy efficiency improvements, efficiency alone will not get us to net zero. Visibility into the future of emerging technologies and rapidly evolving economics is difficult, but critical. Operators will need to create a roadmap and identify the steps they need to take in order to reduce their carbon footprint.
Who are the key stakeholders in decarbonising the MM&M sector?
De-risking investment of this magnitude is critical. Significant spend is required, so investors will be a key stakeholder. They need to understand the pathways and options for decarbonisation if they’re to confidently fund projects.
Other emerging stakeholders include renewable energy suppliers, energy storage providers and power distributors. Governments will most likely play a greater role in support, facilitation and regulation compared to previous decades.
There are interdependencies and synergies between these stakeholders that will make for some interesting contract negotiations in the years to come.
There are so many decisions to make with little clarity. But the stakes are high, and we need to move quickly. How can the industry navigate all of this?
We need the right people and new skill sets. People who understand the world of new energy, energy storage and distributed energy systems. And people who can analyse future energy pricing and evolution of energy transition technology development.
This is not the world of MM&M at the moment. This is the world of new energy and power. We need to bring these worlds together with the people who see opportunities, synergies and solutions in the energy transition and mining.
How do energy-intensive industries like alumina meet demand while finding its place in a decarbonised world?
Additional capacity of aluminium and alumina will be required to meet growing demand for things like electric vehicles and solar panels. Designing greenfield refineries for a decarbonised world is much more logical than applying our current fossil fuel-based designs and then incurring decarbonisation retrofit costs.
Reimagining the alumina refinery of the future is an exciting prospect, a seismic change for the industry. It’s easy to envisage a refinery that no longer needs a boiler plant, or one where energy is distributed between calcination and the Bayer circuit for efficiency. Technologies such as mechanical vapour recompression and liquid air energy storage will be adapted and integrated to best fit within the alumina refining process.
Our alumina decarbonisation roadmap encompasses most technologies for carbon reduction, whether through electrification, fuel switching, or carbon capture. Similar solutions will be widely applicable across the MM&M sector, whether it’s a mine fleet or a smelting furnace.
These retrofits and developments won’t be cheap. But they’re costs that can’t be avoided. Every producer must face the same challenges or face government legislation and social licence that will prevent access to the market. What will give a competitive edge is finding the most economic solutions to these challenges to position future assets low on the cost curve.
What is Worley’s role in decarbonising the sector?
We’re seeing an increased focus in energy transition, with our customer’s project pipelines beginning to align with their decarbonisation commitments.
Worley is on an energy transition journey. And our purpose ‘delivering a more sustainable world’ provides the direction and focus we need to help our customers navigate net zero.
While we have experts in mining, mineral processing and metals, and oil and gas, we also have experts in CCUS, concentrated solar power, on and offshore wind, solar PV, distributed energy systems and energy storage.
It’s this 'clashing of worlds’ that’ll help transform the energy supply of existing assets and re-imagine future designs. Applying these broader skills with our mining sector expertise means we can find the right solutions for our customers, help transform the energy supply of existing assets and reimagine future designs.