Electrifying the global iron ore mining sector alone could require up to US$45 billion of infrastructure investment and add 20-to-30 terawatt-hours of electricity demand, according to consulting firm, McKinsey.
It says the massive investment can generate operational “opportunities”, including energy cost savings of 40-70%, and significant mobile equipment maintenance cost reductions.
“Electric equipment could allow for steeper ramp designs, lower stripping ratios, faster cycle times, and less frequent breakdowns,” McKinsey says.
“A fully electrified mine with renewable-power sources could have a carbon footprint that is 60%-80% lower, avoiding carbon taxes and capturing potential green-product premiums.”
The firm says the global mining industry will likely need to cut its overall emissions by 85% or more by 2050.
The industry not only faces uncertainties around the availability of affordable “clean” energy, but also battery electric vehicle (BEV) technological challenges, according to McKinsey.
“Battery technologies need to achieve higher density, lower costs, faster charging rates, and larger scale to make electric equipment competitive,” it says.
McKinsey says new sources of capital such as green bonds might be needed to fund electrification infrastructure.