Only 0.5 percent of mining equipment is fully electric - McKinsey
Mining equipment that runs on electricity instead of gas and diesel is only starting to become economical now, says McKinsey in a study of miners and climate risk.
Last week Kitco interviewed two of McKinsey's mining specialists: Oliver Ramsbottom, Partner at the Basic Materials Practice, McKinsey, who is based in Hong Kong; and Liesbet Gregoir, Knowledge Expert at the Basic Materials Practice, McKinsey; based in Brussels. Both discussed how miners are making steps towards reducing CO2 emissions.
Miners face two threats when it comes to climate change: miners must maintain their social license to operate if they want to be recognized as good corporate citizens. Second, miners are recognizing climate change is a risk and needs to be mitigated.
McKinsey, in its study of mining and climate change, writes that miners are just now starting to get the tools to reduce their greenhouse gas emissions.
"Moving to renewable sources of electricity is becoming increasingly feasible, even in off-grid environments, as the cost of battery packs is projected to decline 50 percent from 2017 to 2030. Codelco, for instance, uses solar power for one of its copper mines in Chile, and Fortescue Metals is investing in renewable energy at its iron ore mines in the Pilbara region in Australia. BHP recently signed contracts for renewable energy at its Escondida and Spence copper mines," wrote McKinsey in its recent study of climate change and mining.
"Electrification of mining equipment, such as diesel trucks and gas-consuming appliances, is only starting to become economical. Right now, only 0.5 percent of mining equipment is fully electric. However, in some cases, battery electric vehicles have a 20 percent lower total cost of ownership versus traditional internal-combustion-engine vehicles. Newmont, for example, recently started production at its all-electric Borden mine in Ontario, Canada."
Listen to our interview with McKinsey's Ramsbottom and Gregoir.