Rio, BHP and Fortescue at electrification crossroads

Fortescue will spend $US6.2 billion ($9.8 billion) decarbonising its iron ore operations; Rio has estimated it will cost about $US3 billion to halve emissions from its Pilbara mines by the end of the decade. BHP has flagged $US1.6 billion spending between 2023-24 and fiscal 2030 to hit its iron ore decarbonisation target.

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

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

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

The big miners see immense savings in diesel bills and any potential carbon price, and hope for lower maintenance bills in electric trucks.

Otranto claims Fortescue has the best drive train available to run emission-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 truck retro-fitted with its drive train and is working with the Liebherr Group to build at least 120 new trucks.

Liebherr will supply chassis built in Virginia in the US and Fortescue will supply the battery power system and fit them together in Perth. The plan is to build all battery power systems at Williams Advanced facilities in 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 fleet Fortescue intends to replace or potentially retrofit by 2030.

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

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

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

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

In haul trucks, BHP expects to trial a Caterpillar electric model in 2024 and a Komatsu version soon after, with any deployment scheduled from 2018.

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

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

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

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

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

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

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

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

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

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

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

The Gudai-Darri solar farm covering 106 hectares is about one tenth of the 300-350 megawatts Rio is targeting from solar farms. The rest would come from wind farms.

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

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

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

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

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

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

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

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

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

The author travelled to the Pilbara as a guest of Rio Tinto.