Few parts of mining’s deeply entrenched supply chain are as inimical to a would-be disruptor as the heavy haul-truck market where the big shots include Caterpillar, Komatsu, Liebherr, Hitachi and a mob from Belarus. Yet Julian Soles doesn’t seem perturbed.
“I would say our approach is very different,” Seattle-based First Mode’s CEO of about three months says. Starting with the new company’s raison d’etre: to decarbonise mine then other heavy haulage systems.
He adds somewhat irreverently that the start-up “actually [takes] ownership of the full problem”.
“That’s quite a different approach.”
The former head of technology development, mining & sustainability at mining major Anglo American has moved around quite quickly in his career, ultimately, he says, looking for a way he can make what he sees as a real difference. Before joining Anglo in 2018 he’d spent a lot of his time as an engineer in the oil and gas space, mainly in the US. “One of the things I do recognise is there needs to be transition; an orderly one, and so oil and gas is needed, but also we need to get ourselves off it. So as I was looking at my career, and I’ve got a young family as well; I’m wanting to look back at the impact I could have. I decided I wanted to move into more of an energy transition role and the opportunity with Anglo American came up. What they were looking for was someone who could bring different thinking to mining.”
Anglo wanted to shift a $2 billion fleet of more than 400 ultra-class diesel-fuelled mine trucks at operations around the world to non-diesel as part of broader decarbonisation – or sustainability – efforts across the US$50 billion company. Management approached the heavyweight mining original equipment manufacturers (OEMs) about speeding delivery of new-generation propulsion systems, however, as Anglo CEO at the time, Mark Cutifani puts it, “they weren’t going to come with us in the time we needed”.
“If we look at the mine as a system and try to get the best outcome across the system, you can’t look at the grid and then the diesel,” Soles says.
“If you look at them in isolation you come up with a different solution.
“When we looked at haulage we looked at biodiesel, we looked at natural gas, and other solutions. We wanted a solution that will have no local emissions, which drove us to 100% electric, so either battery or a hydrogen-based system. The hydrogen is driven by [the need for] range and energy density.
“As long as you can bring that cost down to be competitive with diesel then you have a solution that gives you the same flexibility that you have in your mine today, which is really important to the miners, at a cost that is almost parity to diesel, and that’s the path that we’re on.
“But if you just looked at the haul truck in isolation without looking at a grid component, you would arrive at a solution [and say] this is too expensive to do; we’re too far off to do this.
“That was some of the different thinking we did.
“We know the OEMs in this case provide a haulage solution, a truck – that’s what they call a haulage solution. We call a haulage solution the whole system.
“So we go right back to … the source of the green electrons and essentially think about custody of the electrons all the way through to drive at the wheels.
“Where’s my renewable energy coming from? How am I going to generate in this case hydrogen? Where am I going to do it? Is it suitably sized, because we’ve got to bring the cost down; you can oversize the system and it can cost you a lot of money. It’s really important that you size it properly to give the reliability that the mine needs. And then, how am I going to refuel? Because whatever solution you go with, whether it’s hydrogen [or] battery … you’re going to have to refuel more often because diesel is an amazing energy storage medium and we haven’t got anything near it.
“What we’re trying to do is get the same performance. We don’t want to say, here’s your solution but you need to double the size of your haulage fleet because it has to be parked up, or you have to stop it every hour, because you’ve got to recharge or refuel it.
“So we have to rethink refuelling: how do you do it differently in a mine? How do we get that energy onto the vehicle efficiently? And then when it’s on the vehicle, how do you use it efficiently?
“One of the reasons we have a large battery system is there is a lot of energy that needs to be recouped as you go back down into the pit and if that’s not captured you end up using a lot more of your source energy; in this case hydrogen. So we’re trying to reduce the consumption as much as possible all the time.
“We don’t want to be providing the customer with an incomplete solution.
“It’s a new technology, there’s new operational requirements that are needed, we’re going to need to do new training for people, the safety is different, and so it’s a different set of risks to be managed now. We have to do all that.
“We looked at what exists in the [new] system, and what needs to be developed.
“Hydrogen generation has been around for nearly 100 years, in electrolysers. We’ve got renewable power. We have refuelling [for] gaseous systems. And we have diesel-electric trucks. So the thing that was missing was a very high-powered, zero-emission engine to replace the diesel.
“And so we spoke to the OEMs. They’re timelines and their willingness to develop that was not high.
“After we did the initial work with First Mode we said, hey, would you be interested in designing the next one, the next phase, and it just grew from there and the company grew from there.
“[First Mode] is much more focused than the OEMs. We don’t have big product lines. We have one solution – the focus for decarbonisation. We don’t have an existing production line producing diesel engines that is going to compete for capital.
“I think we’re a lot more agile because we don’t have those competing priorities.
“Ultimately we built the whole ecosystem in South Africa; we installed the power plant – it’s a 2MW peak power plant, which is a hybrid of fuel cells and batteries – and basically made the world’s first and world’s largest zero-emission haul truck.
“[The] same payload – 300 tonnes – as the [diesel-electric] vehicle does today. Fully laden the whole thing weighs 520t.
“It’s fully electric [and it’s] operational right now.”
Anglo American’s circa-$270 million equity investment in First Mode, and orders for nuGen Zero Emissions Haulage Solutions (ZEHS) that could run into hundreds of millions of dollars over a nominal 15-year delivery horizon (one senses the pace might shift up a gear), mean the company is no ordinary start-up.
It has the backing to continue growing its engineering shop in Seattle, Washington, and expand in ways few newcomers to mining have been able to do. That includes placing an order for not one but two ultra-class mine trucks that will make their way down the highway, about an hour’s drive south of Seattle, to First Mode’s dedicated test centre at Centralia where it is ironically making use of a former coal mine site.
“We’re building a manufacturing facility here [Seattle] now for low-level production,” Soles says.
“And then we have what we call our proving grounds.
“Our engineers are able to go between design, production and testing, all within a few hours. So in one day they can go to all different spots.
“That will help us really drive and move quickly, which is one of the other things we need to do so we can get the system demonstrated at scale.”
First Mode looks like the kind of gig Soles was searching for. He says the company is already talking to big miners other than Anglo about switching to ZEHS.
“I think what’s really exciting for me is just the opportunity that’s ahead of us,” Soles says.
“One of the big things that attracted me is that oversized impact we can have on decarbonisation.
“We’re circa-300 people today, mainly engineers. We’ll probably get up to 400 or so by the end of the year and then we start deploying, and it’s like this relatively small team that can have a huge amount of emissions impact by taking a fleet of ultra-class trucks and decarbonising them.
“A lot of our engineering team come from different backgrounds, whether it’s automotive, whether it is space, but that mix is really important.
“One of the things that attracts talent to us is our sole focus on decarbonisation as opposed to [being] a company that’s making diesel engines at the same time they’re saying they’re going to decarbonise and saying we’ll have a vehicle by 2030.
“We’re saying, no, we’re doing it now. We’re not waiting.
“It’s a super hard challenge which is really attractive to engineers as well.
“We’ve got a customer, so it’s not like we don’t have anyone to sell to. There is a market demand for it [and] I think that really differentiates us.
“You can study this problem and convince yourself not to do it. What we did during the POC [proof of concept] is we actually went and built it and we’re like, wow, this worked really well; this is even better than we thought.
“And so in the next stage I hope to see the same again.
“We’re also focused on taking this beyond mine haulage. We see opportunities in rail and stationary power as well as these really high-powered heavy-duty applications.
“So really what’s exciting is we’re building a capability here at First Mode to be able to scale into these other industries.”
*Julian Soles spoke recently on a Dig Deep mining podcast, the full version of which is worth listening to: https://www.youtube.com/watch?v=WwN1oE1W3q4