The low-carbon transition is coming to the mining sector and coming fast, and the regions that embrace it will gain the most.
Last week’s Copper to the World Online conference in Adelaide, South Australia occurred in the home of both the renewable energy revolution and the world’s key copper belts.
South Australia is the world’s clean energy proving ground, like nowhere else.
South Australia is now operating at more than 55 per cent variable renewable energy and on track for 85 per cent by 2025. It’s the first gigawatt-scale power system in the world that will soon be able to satisfy all its demand on certain days with rooftop solar PV.
It is home to the world’s largest grid scale battery (plus three others) which is being further expanded to provide new and cutting edge system support, allowing more renewables to be brought into the grid.
The world’s largest per capita roll out of home battery storage is being bolted on to some of the 35 per cent of homes with rooftop solar, turning towns and suburbs into “virtual power plants” where batteries operate in concert to shift demand and stabilize the grid.
Now, periods of negative pricing are accelerating the hydrogen economy by providing cheaper clean power, and Australia’s largest electrolyser is being installed to start blending green hydrogen into gas network in Adelaide’s suburbs.
And this clean energy revolution needs resources like copper.
So it’s all coming together in South Australia, and at Copper to the World speakers debated the toll that coronavirus has taken and its impact on a rapidly changing sector.
According to commodity data provider, Fastmarkets, the copper industry alone has seen almost a million tonnes of lost copper mine production linked to the pandemic. The pandemic also continues to affect several major producing regions.
But despite that, things are accelerating towards a sustainable recovery.
The recent announcement by the LME that it will launch a platform to trade ‘low-carbon’ aluminum was the latest milestone for a minerals and metals industry that sees value in matching the zero-carbon ambitions of its major downstream customers, not least the growing electric vehicle sector.
For policy makers, this dynamic provides an exciting opportunity. The market – from exchanges such as the LME, to OEMs, and ultimately consumers – has created a clear incentive for government and industry in major mining regions to harness clean power.
Sustainable production is now joining stable production as a key market differentiator for downstream buyers locking in supply of key technological minerals and metals.
Australia is already well positioned within this new dynamic. The country has been at the forefront of responsible mining and environmental stewardship, setting some of the most advanced and stringent environmental, social, and governance standards in the sector.
The accounting mechanism for water usage within the sector in Australia, for example, has been adopted globally, incorporated into the Global Reporting Initiative (GRI) corporate reporting standards. General practice across environmental stewardship and social licence to operate also remain amongst the highest in the world.
From this foundation, South Australia can demonstrate how deep decarbonisation can turn the Gawler Craton into the world’s leading sustainable mining and innovation region. As the grid is getting greener, these minerals and metals are getting greener too.
The state is resource-rich, hosting two-thirds of Australia’s copper reserves, alongside gold, silver, uranium, high grade magnetite iron ore, and huge potential as a graphite producer. And the state has a proud history of metals production, particularly in steel and lead.
Through BHP’s Olympic Dam mine and OZ Minerals‘ Prominent Hill mine, it is also home to some of the most technologically advanced copper production in the world. Recently, at the height of the pandemic, Prominent Hill became the first mine in the world to trial a tele-remote operation for minerals exploration drilling underground.
The company and a consortium that includes the South Australian Government, Adelaide University and the Rocky Mountain Institute are collaborating to develop renewable energy and demand management on mine sites in the state.
The program’s first project is a trial installation of a 250-kilowatt hybrid energy facility using solar, wind and battery storage located at the OZ Minerals’ new Carrapateena copper gold mine. This collaboration highlights the state’s well-developed renewables and tech sector, and the innovation eco-system being developed around the mining sector.
Last week, at the Copper to the World Online event convened by the South Australian Government’s Department for Energy and Mining, the Zero Emission Copper Mine of the Future was launched.
Commissioned by the Australian copper industry and delivered by the world leading Warren Centre, the study provides a world first roadmap to greener, cleaner, smarter mining using existing and emerging technologies, and identifies five targets for industry and government: collaboration in exploration, movement of materials, ventilation, processing and use of water.
It shows that this transition would drive enhanced productivity, competitiveness and new high tech industries.
There are also interesting projects ranging from blockchain and traceability to autonomous transport happening in a vast range of commodity supply chains.
Through the recent launch of the CORE Innovation Hub at the renowned Lot Fourteen innovation precinct, the state has created a home base to accelerate these innovations.
Coronavirus has not slowed this transition. That is why we will continue to drive this agenda in South Australia to demonstrate what productive and sustainable mining will become.