Latest Resource Sector Data shows tax incentives are needed to drive the electrification of Australia’s mining fleet – emissions targets out of reach in their absence

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The mining industry is at a crossroads as latest industry insights reveals that electric mines can operate at costs between 56% and 88% lower than their diesel-powered counterparts.

However, just 60% indicate that their next mining operation will transition to electric.

Nearly all (84%) of industry professionals believe that Australia’s mining sector will not meet the government’s goal of achieving 82% renewable energy penetration by 2030.

The primary barrier to adopting electric equipment, cited by 76% of miners, is the high capital cost, which is rated 1.5 times more significant than the next major concern: confidence in operational effectiveness.

In light of these findings, the industry is urging the government to implement tax incentives to accelerate the decarbonisation of mine sites.

“With diesel particulates posing severe health risks such as lung cancer, and with current Australian standards being over 6x higher than level considered safe by Safe Work Australia for underground miners, electrification is not just an economic opportunity; it’s a health imperative,” stated Graeme Stanway, chair of the Electric Mine Consortium, “investing in cleaner technologies can eliminate these hazards and support our commitment to sustainability.”

These findings are based on the first and most extensive collaborative financial modelling exercise on mine decarbonisation undertaken in the Australian mining industry, allowing executives to identify to granular detail the risks, opportunities and pathways to electrify.

Mark Norwell, Managing Director & CEO of Perenti, whose business recently teamed up with their client IGO and business partner ABB, to complete one of the first studies of converting an underground mine’s fleet from diesel vehicles to BEVs, said all stakeholders had a role to play in the shift to mine electrification.

“The study we recently conducted demonstrates that we are getting closer to an all-electric mine and that collaboration is the key to make it happen.

“We are optimistic that in time an electric underground mine will be the most economic and socially responsible mining method. The electrification of underground mines will deliver significant benefits to health, environment and cost.”

The CEO of Sandfire, Brendan Harris, noted “our purpose is to mine copper sustainably to energise the future, so we welcomed the opportunity to collaborate with industry peers to build a deeper understanding of electrification. Renewable energy already accounts for 73% of our electricity needs and we have a decarbonisation plan to reduce emissions by 35% by 2035 and achieve Net Zero emissions by 2050.”

Ivan Vella, Managing Director and CEO of IGO Limited, noted “Our collective journey toward decarbonisation will only be achieved through collaboration and cooperation across our industry. More than just helping demonstrate the value case for mine electrification, the EMC has facilitated the sharing of findings and been an effective advocate for our industry as we pursue our respective decarbonisation roadmaps.”

Context: Mining and Environmental Sustainability

– The global mining industry contributes 8% of total emissions.

– Over 80% of listed miners have committed to net-zero targets.

– Currently, less than 10% of the Australian mining sector utilizes renewable energy.

– While 15% of Sandvik’s global haul truck production is battery electric, no BEVs have been sold in Australia to date for on-going load and haul production

– It is estimated that 90% of the mining workforce will experience hearing impairment by age 50.

Specific Areas of Cost Reduction

Transitioning to electric mines presents substantial benefits, including:

1. A 100% reduction in Scope 1 & 2 emissions for fully electric mines powered by renewables.
2. Up to 30% reduction in overall operating costs.
3. Up to 50% reduction in energy costs.
4. A 20% decrease in maintenance costs.
5. A 30% reduction in ventilation costs.

About the EMC

The Electric Mine Consortium (EMC) comprised over 30 companies participants globally, including major Australian miners such as South32, Barminco, IGO, Blackstone, Bellevue, Sandfire and MMG. With an average of over 150 participants engaged monthly, and more than 300 participants in total, the EMC is dedicated to advancing the industry and electrification in mining.

For reference: EMC electric mine modelling critical inputs

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