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Rio, BHP andFortescue at electrification crossroads

Iron ore miners in the Pilbara are under pressure to slashtheir emissions and preparing to fork out billions of dollars on emissions-freehaul trucks and renewables

Fortescue Metals principal of build and test Gavin Selth saysthat in motorsport, everyone talks about making it on to the grid.

The theory is that if you’re not on the grid, you’re not in therace. Selth is a former project manager at Williams Advanced Engineering, anoffshoot of the Williams F1 racing team

Fortescue gobbled up Williams Advanced, based in Oxfordshire inthe UK, last year as part of the green ambitions of chairman Andrew Forrest.

Now Selth is out at Fortescue’s Christmas Creek mine in WesternAustralia’s Pilbara, where the temperature nudged 40C last week, trying toadapt some of the technology applied in racing electric cars in Formula E tomoving big tonnages of iron ore using haul trucks.

Fortescue wants its mining operation emissions-free by 2030.Bigger iron ore rivals Rio Tinto and BHP are advancing, but not going as fastor spending as much money. Rio is aiming for a 15 per cent reduction by 2025and a 50 per cent reduction by 2030. BHP is targeting a 30 per cent reductionby 2030.

Fortescue will spend $US6.2 billion($9.8 billion) decarbonising its iron ore operations; Rio has estimated it willcost about $US3 billion to halve emissions from its Pilbara mines by the end ofthe decade. BHP has flagged $US1.6 billion spending between 2023-24 and fiscal2030 to hit its iron ore decarbonisation target.

All three are relying on renewable energy to replace the gas anddiesel that currently power their mining, rail and port operations, but makingslow progress on the vast solar and wind farms that will be required.

Fortescue chief executive Dino Otranto says the electric haultrucks being developed by Fortescue are something like a super-sized version ofa Toyota Prius.

Haul trucks are the biggest users of diesel in Australia. BHPuses 1.5 billion litres a year to run machinery and other equipment in its Australianiron ore and coal mines. Fortescue uses 700 million litres a year, while inrail operations alone Rio chews through 700,000 litres a day.

The big miners see immense savings in diesel bills and anypotential carbon price, and hope for lower maintenance bills in electrictrucks.

Otranto claims Fortescue has the best drive train available to runemission-free haul trucks and other heavy machinery, thanks largely to the acquisition of Williams Advanced, which also came with software vital to battery management.

Fortescue has been showing off an old Terex haul truckretro-fitted with its drive train and is working with the Liebherr Group tobuild at least 120 new trucks.

Liebherr will supply chassis built in Virginia in the US andFortescue will supply the battery power system and fit them together in Perth.The plan is to build all battery power systems at Williams Advanced facilitiesin the UK and for the first trucks to arrive at Fortescue mine sites in 2026.

The 120 trucks will represent about a third of the fleetFortescue intends to replace or potentially retrofit by 2030.

Otranto is full of optimism less than two months since the shockexit of former chief executive Fiona Hick. Forrest says her departure after sixmonths in the job stemmed from a reticence to get on board with the company’sradical green reinvention.

Anglo American, which is committed to making its minescarbon-neutral by 2040, also has its own drive train. Other big miningcompanies have opted to stay out for the space while working with truckmanufacturers on battery and hydrogen fuel cells.

Although Fortescue has started making hydrogen at its green energyhub at Christmas Creek, Otranto says it makes sense to use batteries powered byrenewables in the sun-soaked Pilbara rather than hydrogen fuel cells.

BHP agrees, with vice-president of planning and technical, AnnaWiley, telling investors in June: “Our view is that a battery-electric fleetwill be more efficient, in all ways, than hydrogen, and that is the pathway weare taking.”

In haul trucks, BHP expects to trial a Caterpillar electricmodel in 2024 and a Komatsu version soon after, with any deployment scheduledfrom 2018.

BHP intends to roll out trolley assist – where trucks areconnected to power line infrastructure for part of a haul journey – as part ofelectrification in its copper operations in Chile. Wiley says it has modelledPilbara iron ore mines with hundreds of configurations of dynamic, or trolleyassist, charging and static, or plug-in, charging stations.

Rio is planning trial work on battery-electric trucks withCaterpillar and Komatsu as part of green ambitions in the Pilbara that extend to using renewables to producegreen iron.

Rio says there are plenty of options for its mining fleet andthat it remains agnostic about the solution. The trolley assist model is beingconsidered, but it hasn’t ruled out hydrogen.

In rail, Rio will take delivery of four electric locomotives inearly 2025 for trials in which it expects to learn a lot about batteryperformance in the Pilbara.

Rio general manager of rail, ports and core services, RichardCohen, says whether they prove a viable alternative to diesel will be all aboutsize and scale.

Electric locomotives are nothing new, but Rio covers vastdistances delivering close to a million tonnes of iron ore a day to its portsand needs a lot of megawatt hours.

“The thing about our locos is they’re about 13-14 megawatt hoursas a horsepower measure,” says Cohen. “The battery electric locos runningaround in the world today are about 2½. Call it 20 per cent of what we need fora like-for-like replacement. So it’s about battery density to get alike-for-like replacement.”

The locomotives Rio has purchased from Wabtec Corporation as afirst step are 7-8.5 megawatt hours.

Cohen says the trial is about helping manufacturers anddevelopers “get to a solution that suits us because if we don’t lean in, no-onewill do it”.

“We’ll learn a lot about batteries in the Pilbara, batteries ontrains, discharge cycle, recharge cycle,” he says.

Rio has built a 34 megawatt solar farm alongside the newGudai-Darri mine, but will need many more solar panels and vast tracts of landto produce the 600-700 megawatts it is targeting just to displace gas in itsoperations.

The Gudai-Darri solar farm covering 106 hectares is about onetenth of the 300-350 megawatts Rio is targeting from solar farms. The restwould come from wind farms.

If viable options emerge to displace diesel, Rio estimates itwill need about 3 gigawatts, or 3000 megawatts, to hit decarbonisation targets.

Rio iron ore boss Simon Trott says it will look to own andoperate some solar and wind farms and also look to third parties, includingtraditional owner groups like the Yindjibarndi Aboriginal Corporation, for supply of renewable energy.

Rio, BHP and Fortescue are all likely to have to get traditionalowners groups on board to build wind and solar farms.

Fortescue, currently locked in a high-stakes legal battle withthe Yindjibarndi, has a long way to go as it targets 2-3 gigawatts through amix of solar and wind farms.

Fortescue has a 100 megawatt solar farm close to completion nearits Iron Bridge magnetite mine and relies on an Alinta-owned 60 megawatt solarfarm to supply its Chichester green energy hub.

Otranto says Fortescue is looking at the option of using formermine sites earmarked for rehabilitation for the wind and solar farms.

“So you convert what’s a liability to an asset that can continueto supply green energy far beyond the mining footprint. That’s a model that hasbeen used across the world. We believe it is a win-win,” he says.

Rio also sees merit in using former mine sites as homes forsolar and wind farms.

Fortescue is seeking approvals to start work on wind farms andland access agreements for solar farms and says it is involved in commercialnegotiations with a number of Indigenous groups.