Technological innovations have made lower emissions in mining and energy generation more viable than ever before. Australia is among the world’s top producers of mineral commodities crucial to the clean energy transition, meaning its mining sector accounts for a significant proportion of the nation’s greenhouse gas emissions.
In light of this, majors and juniors around the country are strategizing ways to decarbonize their operations, which offers the potential to help Australia meet its net-zero commitments. Numerous companies are already investing billions in pursuit of more renewable technologies and alternative production methods.
According to a report by the Clean Energy Finance Corporation (CEFC) called The compelling case for decarbonisation: Mining in a low emissions economy, Australia’s mining sector accounts for 9.5% of national Scope 1 and 2 emissions, with downstream emissions higher depending on the commodity.
The report encourages the decarbonization of the industry and listed significant advances in low emissions technologies that would enable the sector to capture the economic benefits of more sustainable mining. Substantial investment, innovative market development, and accelerated emissions objectives are critical if Australian miners want to lead the market.
CEFC resources executive director, Rob Wilson said, “Mining has been a cornerstone of the Australian economy, delivering the minerals needed for global growth and prosperity. The world now needs a different mix of minerals and metals, and Australian mining can ride the wave of opportunity offered by the push to net-zero.”
“Australia has a comparatively large share of the critical minerals needed to power the low emissions economies of the future.”
Wilson added, “By helping meet surging demand for these resources, the mining sector can help Australia and the world achieve net zero emissions by 2050, while continuing to create jobs and opportunities around the country.”
Fortescue Metals Group (ASX: FMG)
Fortescue is at the forefront of the majors leading the way to decarbonization. The company made an announcement in 2022 committing to spending US$6.2B over the next decade to decarbonize its iron ore operations by 2030. The move will also assist the company in reducing its operating costs by US$818Mpa.
The Perth-based company provided a capital expenditure breakdown, highlighting it will spend US$3.2B to construct renewable energy, battery storage, transmission lines, and onsite charging infrastructure at its projects in Western Australia.
Fortescue also recently took a major step forward in its decarbonization journey by completing the design and delivery of a 1.4M megawatt prototype power system, the world’s largest battery of this kind, which is integral to the firm’s decarbonization strategy. The power system was designed for integration into a 240t mining haul truck and will be an important part of Fortescue’s strategy to reach zero terrestrial emissions (Scope 1 and 2) across its iron operations by 2030.
Rio Tinto (ASX: RIO)
Rio Tinto has stated, “Due to the scale of our mining operations and processing activities we have significant Scope 1 and 2 emissions. And we know we must address this with urgency to be part of the solution. Between now and 2030, we must switch to renewables at scale and at pace, electrify everything we can, work across our entire value chain, accelerate the development of new technology, and address emissions related to processing heat at our alumina refineries and minerals processing operations.”
To combat pollution, the company aims to reduce its Scope 1 and 2 emissions by 15% by 2025 and by 50% by 2030. Rio estimates that it will invest US$7.5B in decarbonization projects, predominantly in the second half of the decade.
A key focus of Rio’s US$7.5B plan is transitioning to high penetration renewable energy to power its mining operations and communities in the Pilbara. That means replacing gas and diesel with clean, renewable energy.
The world now needs a different mix of minerals and metals, and Australian mining can ride the wave of opportunity offered by the push to net-zero
Origin Energy (ASX: ORG)
Power and gas supplier, Origin Energy, has announced it will replace the Eraring coal-fired power station in New South Wales with a US$600M battery power plant, in a move that will commence within weeks.
Origin Energy explained that the initial stage of the construction of the battery storage system involves the development of a capacity of 460 megawatts, with a dispatch duration of two hours. It is expected to start operating in the last quarter of 2025.
The company could increase the capacity of the battery to 700 megawatts and four hours of dispatch duration.
Greg Jarvis, Origin’s head of energy supply and operations, said the Eraring battery’s development is vital in transforming the Eraring site as it plans to exit coal-fired generation as early as August 2025.
BHP (NYSE: BHP)
Similarly, BHP is on track to reduce its operational emissions by at least 30% by FY30 from FY20 levels. BHPs’ strategy prioritizes the electrification of its fleet, eliminating the excess use of diesel.
The mega-company is also working to address its operations methane emissions. The company explains that methane accounted for 32% of BHP Mitsubishi Alliance’s (BMA) and 15% of Australia’s reported operational emissions for FY201.
BMA is one of the lowest carbon intensity emitters among BHP’s global coal competition, with current available technology, the company anticipates that up to 50% of BMA’s total forecast methane emissions could be extracted and actively managed.
BHP is actively working to understand the characteristics of this gas, determine its optimal use, and is exploring new and innovative technology options to allow it to extract and manage the remaining forecast methane emissions.