Make Kitco Your Homepage

Sandvik expects bigger market for battery-driven mining gear in 2-3 years

Kitco News

By Helena Soderpalm

STOCKHOLM, June 10 (Reuters) - Sandvik expects the market for battery-electric underground mining equipment to hit a higher gear in 2-3 years, as mining companies attempt to lower emissions and cut costs.

With an electrification boom looming, Sandvik, whose competitors include Epiroc and Caterpillar , could sell more electric than diesel-driven underground mining kit in 10 years, its mining business head said. Although Sandvik has some 30 battery-electric loaders and trucks in underground mine production, which it says is more than any competitor, these make up less than 0.5% of its total fleet of loaders and trucks.

But while the market is still limited, it is gaining pace, said Henrik Ager, head of Sandvik Mining and Rock Solutions. "In the past two years we have gone from thinking that electrification might turn into a great technology shift to becoming certain that's where we're heading," he said. Around 60% of an underground mine's energy consumption is for infrastructure, which is mainly electrified, but loaders and trucks, carrying up to 65 tonnes of rock, still run on diesel.

Ager said electric machines should be fully proven to work in mines and be discussed in all procurement in 2-3 years. Investment bank UBS said electrification will bring lower emissions and savings for mining companies. "In the years to come we shall see an accelerated replacement cycle for especially underground mining equipment, although surface equipment will also benefit from solid growth rates," analyst Guillermo Peigneux Lojo said. Battery-driven machines are more expensive to buy, but savings on ventilation and cooling, big costs in underground mines, makes it beneficial to go electric already, Ager said.

It could take time, however, before fully electrified mines. "Let's say we start selling more electric than diesel in 10 years ... before most diesel has been swapped for electricity, it's been more like 15-20 years," Ager said, adding Canada has moved farthest due to tough diesel rules. Sites which use Sandvik's battery-electric equipment include Newmont's Borden gold mine and New Gold's New Afton mine in Canada.

The Swedish firm, whose equipment uses lithium-ion rechargeable batteries, expects to offer a full range of underground electric loaders and haul trucks by 2022. Sandvik, which has automation installed in some 65 mines, estimates that around 1,000 underground mines have a strong business case for automation. Ager said Sandvik's ambition is the same as U.S carmaker Tesla's - to build around the battery, rather than starting with the vehicle itself.

"It's the Tesla parallel. That is what they have done, and it's much better," Ager added. (Reporting by Helena Soderpalm; Editing by Alexander Smith)

Messaging: helena.soderpalm.reuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.