Rio Tinto pumps $2b to power Pilbara with clean energy
Rio Tinto will spend about $2 billion ($US1.5 billion) on
wind and solar energy in the Pilbara to slash its use of gas, marking the
miner’s first step towards green steel that could eventually lead to the
massive processing facilities in WA’s north being powered by renewable energy.
In October, the global mining giant announced it would halve
its direct carbon emissions by 2030. For its vast Pilbara iron ore operation,
that means first finding alternatives to gas for power generation and then the
tougher task of replacing diesel for trucks and trains.
Rio Tinto iron ore chief executive Simon Trott said the
miner would install one gigawatt of wind turbine and solar panel capacity to
generate about 80 per cent of the power it needs.
One gigawatt, or 1000 megawatts, of renewable energy is
seven times larger than WA’s biggest solar farm in Merredin that will have
360,000 panels, or four times the size of the Yandin wind farm in the Mid West
that has 51 turbines with blade diameters of 150 metres.
Mr Trott said the Pilbara was one of the best places in the
world for combining solar and wind, with the wind often strongest at night, and
the investment did not need a carbon price to stack up. Gas will still be used
to firm the variable renewable energy and supply about 20 per cent of the power
the mines need.
Rio Tinto plans to use its balance sheet to fund the switch
to cleaner energy and upgrades to its transmission system to handle the
different energy flows from renewables, with announcements of specific
investments expected throughout 2022.
Slashing use of the 480 megawatts of gas-fired generation
capacity that generate about a third of the iron ore operation’s emissions is
relatively straightforward for Rio as the technology exists today at scale.
The real challenge for Rio Tinto this decade is tackling the
more than one million tonnes of carbon dioxide emitted every year from diesel
burnt in its trucks and trains.
Much-hyped hydrogen does not feature strongly in Rio’s plans
that focus on redesigning mining to reduce truck use and lithium-ion batteries.
Like BHP, Rio is considering moving to crush ore in the mine
pit allowing the rock to be moved on a conveyor powered by renewable
electricity, reducing long trips by trucks.
A move to greener mining may also reverse an industry trend
to achieve economies of scale with ever bigger trucks.
With the introduction of autonomous trucks, which Rio
already operates more than a hundred of, using more but smaller trucks to
better match the capability of existing battery technology no longer incurs the
cost of extra drivers.
Smaller trucks have the advantage of being able to use
narrower roads that would allow steeper pit walls, reducing the amount of earth
to be moved to access the ore.
Mr Trott said Rio was leaning towards batteries being
practical before hydrogen for emissions-free trucks.
“But we’ll certainly have the optionality to switch between
the two,” Mr Trott said.
Rio and its principal Pilbara iron ore competitor BHP have
both agreed to work with the two global giants of earthmoving equipment - Caterpillar
and Komatsu - to develop zero-emissions trucks. Komatsu plans a “power
agnostic” truck that could use conventional diesel-electric power, tram-like
overhead wires, batteries or fuel cells that generate electricity from
hydrogen.
Electrifying the locomotives that move iron ore largely
downhill to port offers the possibility of regenerative braking where electric
motors act like generators absorbing energy from the train’s movement to slow
it down while charging the train’s batteries.
Mr Trott said Rio Tinto would likely start decarbonising its
rail network by mixing battery and diesel-powered locomotives.
Rio aims to trial zero-emissions trucks and locomotives by
2025 and purchase no new diesel-powered units after 2030. However, it will take
time to wean iron ore mining off diesel as haul trucks typically last 15 years
and locomotives twice that.
The initial $2 billion investment in a gigawatt of renewable
energy will displace most gas from power generation but only cover the early stages
of diesel replacement.
A further two gigawatts of renewable energy must be added
later for Rio Tinto to complete the move of its Pilbara operation to green
energy.
While iron ore mining produces about 10 per cent of Rio
Tinto’s direct Scope 1 and 2 emissions, its transformation into steel by its
customers accounts for about 70 per cent of the company’s Scope 3 emissions.
Steel production must change as it produces about eight per
cent of global emissions.
However, unfortunately for Australia, Pilbara ore that
earned $149 billion in export revenue last financial year, is not an ideal
feedstock for the likely switch from blast furnaces to electric arc furnaces
that are less tolerant of impurities in the Australian product.
“Pilbara ore is a challenge,” Mr Trott said.
Rio is developing two technologies to solve the problem.
One option is to combine biomass such as straw with the ore
and add heat from microwaves to produce pig iron for steel mills. An
alternative is to use hydrogen to make hot briquetted iron, which is melted to
allow impurities to be removed before the product feeds a furnace.
“They’re early stages...technology takes time to develop,”
Mr Trott said.
Both processes essentially combine iron ore with clean
energy, leading to the possibility of something WA governments have chased for
decades: downstream processing in the Pilbara.
“It’s got tremendous advantages in terms of renewables, the
iron ore is there, and so that’s absolutely something that we would look at,”
Mr Trott added.
“The pathway we’re taking with our renewables is to make
sure we’ve got the optionality to expand if the opportunity presents itself.”
However, he said there was no prospect of Rio making steel
in the Pilbara as the mills were normally located near customers.
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