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Mining sector reducing CO2 emissions: Mining is going green

Mining companies are shifting to a more sustainable supply chain and operations as demand for materials grows.

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Quantumrun Foresight
June 20, 2023

Insight highlights

As global pressure from governments, environmental organizations, and customers mounts, mining operators are increasingly prioritizing carbon reduction efforts and transitioning to clean energy solutions. Electrified vehicles and equipment offer benefits such as reduced exposure to emissions, lower operational costs, and decreased ventilation needs. These efforts signify a disruptive shift towards environmentally conscious mining practices.

Mines reducing CO2 emissions context

Large mining projects are becoming increasingly conscious of their carbon footprint and are transitioning to clean energy. For example, Chile’s leading copper producer, Codelco, has created sustainability plans encompassing five action areas for its operations and projects. The company has set goals to cut carbon emissions by 70 percent, reduce inland water consumption by 60 percent, and recycle 65 percent of industrial waste by 2030. To help achieve these objectives, the company invests in EVs and machinery and is sourcing new clean energy providers.

Electric equipment, in particular, is becoming popular among mining operators. For example, as of 2022, Australian multinational BHP’s Jansen potash project is expected to be one of the largest mining projects in terms of initial capacity, with estimated production ranging from 4.3 to 4.5 million metric tons per year. Potash is a mineral essential for our health that often appears in fertilizer products and provides a rich source of potassium. Potassium-based fertilizers are the most popular type used, but more than 70 percent rely on old-fashioned mining methods that require heavy-duty equipment to extract the mineral from underground mine shafts.

A new contract to supply battery EVs to the Jansen potash project can reduce carbon emissions by half. The mining company behind this project, Normet Canada, was given ten underground EV loaders and one tethered electric loader. The electric vehicle deliveries will start in March 2023 and continue through 2024, allowing the miners to begin production in 2026.

Disruptive impact

Mining operators will likely engage with green tech firms as global pressure mounts from governments and environmental organizations. Customers are also becoming more ethically aware and prefer products that have lower carbon footprints. More importantly, investors are starting to avoid or minimize their involvement in the most polluting sectors, like the mining industry.

Conversion to electrified vehicles and equipment may also escalate. For example, in 2021, Kenya-based Opibus (now ROAM) converted a Toyota Land Cruiser to use an electric powertrain, making it a mining vehicle. This move was part of their more extensive operation to reduce emissions in the global mining sector. By using electric vehicles, miners can lower the temperature and carbon exposure they face with diesel-powered equipment. In addition, EV mining technologies can reduce costs as they require less ventilation and cooling.

Meanwhile, Canada-based Snow Lake Lithium announced its plans to develop the world’s first all-electric lithium mine, which would mitigate many of the pollution concerns currently associated with traditional battery manufacturing processes. The mining company’s CEO noted that if they extract and utilize minerals for EV batteries to protect the environment, obtaining them must also be done sustainably. Snow Lake is partnering with Meglab, an electrical equipment provider and mining solutions company, to accomplish this goal.

Implications of mines reducing CO2 emissions

Wider implications of the mining sector reducing its CO2 emissions may include:

Increasing opportunities for electric equipment manufacturers as mining companies actively collaborate for specialized machines.

Governments subsidizing green tech for state-owned mining hubs to meet their zero-emission targets.

Mining companies investing in renewable energy sources to power their operations and improve their environmental, social, and governance (ESG) ratings. Such investments could accelerate regional green energy grid infrastructure development, especially in rural regions.

Manufacturers (especially for EVs and utility-scale batteries) carefully selecting their mining providers based on their ESG metrics, as these producers transition to a more sustainable supply chain.