Net-zero, virtual pipelines and hybrid energy: mining in 2022 and on

The mining industry is at a crossroads.

The energy landscape is in the middle of a tectonic shift. Growing uncertainty is making it harder to access capital. Cultural and organizational norms trend towards decarbonization and sustainability. Investors want quicker return on investment, lower capital expenditure and increased production — simultaneously. Threatening viability more and more by the day.

In our more than 30 years serving the mining industry — and more than 50 years in business — we’ve seen existential threats. But nothing quite like the state of mining in 2022.

So what does mining look like in the rapidly changing, highly competitive world of today? How does a mining company reach net-zero? Adapt to cultural and capital realities?

We spoke with Nick Dunn, Sector Leader of Mining, North America, at Aggreko about the mining industry’s transition to hybrid energy solutions. Here’s what he had to share.

What’s the biggest challenge for mining in 2022?

While the difficulties may seem insurmountable on the surface, Dunn does see a solution: repositioning the mining industry as an efficient and environmentally-viable solution.

“The cost of energy remains one of the biggest costs to a mining operation. And efficiency and reliability are key,” said Dunn. “How do mining companies maximize production to meet the growing market demands while progressing towards meeting their aggressive energy transition goals — and reducing their dependency on fossil fuels?”

In other words, how can the mining industry survive the energy transition?

It starts in the mines. By reducing power generation costs, reaching net-zero emissions and taking an active role in the energy transition, mining companies appeal to their investors and benefit their customers — while reversing the industry’s reputation for inefficiency and pollution.

As an energy partner for mines all around the world, Aggreko is in a unique position to lead the charge. Dunn shared Aggreko’s energy pledges with us:

• By 2030, Aggreko will reduce diesel fuel usage with its customers by 50%.
• In addition, Aggreko will reduce local air quality emissions by 50%.
• Aggreko will be a 100% Net Zero organization by 2030.
• Every year, Aggreko will invest $300 million annually towards technology development and supporting the energy transition.

This, as Dunn put it, both leads by example and supports customers with their initiatives.

Exploring hybrid mining energy solutions with Gold Fields

Hybrid energy solutions are the future of mining in the shift to cleaner energy.

Take Gold Fields, one of the largest gold mining companies in the world, and according to Dunn, Aggreko’s “flagship hybrid power project.”

Over the better part of the past decade, Aggreko's been partnering with Gold Fields and supported their commitment to reducing their carbon footprint,” Dunn shared with us.

For example, Gold Fields needed to improve the operational efficiency and decrease emissions at Granny Smith, its underground mine located approximately 740 kilometers northeast of Perth, Australia.

The mine was initially powered by a 22-megawatt gas generator. Five megawatts of thermal power, 7.4 megawatts of solar power and two megawatts of battery energy storage were supplemented three years later.

1. Supply and install a pressure-reduction skid to lower pipeline gas pressure before it’s delivered to the generators.
2. Design and engineer a heat-recovery system to help control temperature change during pressure-reduction excess and wasted heat.
3. Convert the generator from diesel to natural gas.
4. Replace gas-powered equipment with hybrid and sustainable sources over time to increase efficiency and cost-effectiveness without downtime.
5. Optimally place wind turbines to generate the best possible wind power.

This resulted in immediately realized savings, significantly improved efficiency, and a hybrid power system at the forefront of the energy transition.

Reducing diesel fuel usage with virtual pipelines

On its face, transitioning from diesel power can seem almost impossible. The capital it takes to build or replace pipeline infrastructure is astronomical. Especially for remote mines.

Enter virtual pipelines. By powering mines with natural gas-powered engines — supplied with liquid natural gas delivered via truck — mines are able to reduce diesel gas usage easily. This also helps revive the viability of remote mining locations, which are increasingly squeezed out by infrastructure costs and a lack of investment capital.

Virtual pipelines are already working successfully in three separate countries, Dunn emphasized: “This can be done anywhere around the world.”

Final thoughts: hybrid power makes environmentally friendly mining a reality

Uncertainty is only natural. Especially in a world where the need for net-zero is urgent — and where industries like mining seem at odds with the future. But, in reality, hybrid energy won’t just keep the mining industry alive, it could be exactly what the mining industry needs to bring itself back to its former glory.

Hybrid energy increases efficiency, improves environmental impact and restores investor confidence. It puts remote mines back in business. And it helps the mining industry do what it does best: supply natural resources to the industries that depend on it.

And as Gold Fields proved, a power generation partner with an eye for the future can be exactly what a mining company needs: reducing risk and cost while navigating the energy transition.

“We've come a long way from being a diesel-only provider,” Dunn said.

Mining’s come a long way, too.

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