The world’s largest incumbent mining equipment manufacturers are going to have their hands full with diesel fleet replacement in major developed markets over the next 10, or maybe even 20 years, the 2024 Energy and Mines conference heard. It looks likely to open up significant opportunities for other players in so-called developing markets.
While business leaders from Caterpillar, Komatsu, Liebherr and First Mode at the event in Perth, Western Australia, sounded as confident as they could be – in the early stages of a “period of discovery” of what new-generation machines can and can’t do – about their capacity to meet looming demand, there was also a suggestion key markets such as Australia, North America and Europe are at the front of what will be long factory and refit-shop delivery queues.
Early uptake of battery-electric and hybrid powertrain equipment in these markets would be driven by regulatory and possibly financial-market forces, the event heard, with fleet replacement schedules and new projects opening specific windows.
US and European government energy-transition incentive spend will grease these wheels first.
Large, or ultra, class equipment still dominates the fleet menu of tier-one and two miners in mature markets. Caterpillar, Komatsu, Liebherr, Hitachi, Sandvik and Epiroc, et al, have factories and supply chains tuned to making this gear, with or without powertrain and fuel system adjustments.
Significant volumes of smaller-scale machines are supplied into less ‘advanced’ mining countries and regions, and it’s fair to say the range of vendors in these markets is wider. But they are currently minnows compared with the big fish in the mining OEM pond.
Asked by BHP carbon management principal Steve McGill about the timing of large-scale adoption of battery-electric surface and underground mine vehicles, Liebherr-Australia’s sales and marketing general manager Brian Boltano said current indicators pointed to a 10-to-20-year horizon for “the developed mining jurisdictions, the United States, Canada, Australia [and] parts of Europe”.
“We are very focused of course on those markets,” he said.
“In the emerging mining markets, [such as] Africa [and] Southeast Asia, I think it’s going to be a lot longer before those markets start to adopt electrification.”
Throw in Russia, China and less developed South American markets than Chile, Peru and Brazil, even the Middle East, and the melting pot of laws, commodities, deposit and mine types, and corporate ambitions outside of the major established markets is huge. And potentially lucrative.
Some of these secondary markets may lead adoption of smaller-scale battery-electric – if not autonomous – equipment, given the soft and hard infrastructure in place.
In any case, opportunities for second and third tier suppliers to scale that might not have emerged under business-as-usual market scenarios are more likely to open up, especially while the attention of major incumbents is fixed over long periods elsewhere. And while certain countries ramp up domestic manufacturing plans.
There is a belief that tier one miners and jurisdictions will drive demand for electrification as they have for automation. In fact, the handful of major mining equipment manufacturers is counting on that.
“I think that for some years there’s been a great debate around the ability of the OEMs to deliver the product on time,” Boltano said.
“I would say today that the product [commercial availability] may not be the constraint … and that is partly because there [will be] a staggered buy-in to electrification.
“The tier ones are going to be the first to come … and they will be followed by the tier two and tier three miners who are not able, because of their size and scale, to make the [same financial] commitments.
“That will allow for the OEMs to taper in product as the market demands it at different times.
“I think the major challenge is going to be accommodation of the product on mine sites through electrification, through grid updates and changes to infrastructure required to support [the new equipment].”
Boltano was on a panel hosted by McGill at Energy and Mines 2024 with Caterpillar chief engineer for autonomy and automation, Carl Hendricks, Komatsu Australia product manager for sustainable mining, Kevin Mascarenhas, and First Mode VP business development, Jan Haak.
US-based First Mode, backed by mining major Anglo American, is producing retrofit hybrid ultra-class truck power systems at a new factory in Seattle, Washington.
The rest are heavyweight, diverse equipment manufacturers.
The panel agreed the industry was on a steep learning curve.
“We’re going through a period of discovery where all of us are going to put our current generations of equipment and the battery technology we have in place [into the market],” Hendricks said.
“We demonstrated the operation of our first 240-ton [payload] battery electric truck to our early learner industry partners in Tucson at the end of last year and we’ll be introducing the first early learner units into the industry this year.
“They’ll go into operation at customer sites and we expect to learn a lot about the performance of the vehicle itself and just how well the technology performs.
“We’ve been working on it for several years now. We’ve demonstrated that it can operate – the potential that is. Our focus will be on optimising from … wherever it is we’re starting from.
“When we started off with autonomy as a comparable challenge 10 years ago … the productivities we had versus where we are today and what you can achieve with it through evolution of that technology is like night and day.
“So I think we’re just at the beginning of it.”
Boltano said: “If you look at the decade leading up to 2020 the willingness or ability of the industry groups, and specifically mining houses and OEMs, to really work collectively and collaboratively on zero emissions was extremely limited.
“That was on the one hand because OEMs were largely afraid of disrupting themselves.
“And they saw that moving away from diesel engines was potentially the death of their business model, which was I think pretty short sighted.
“The mining houses were not yet willing to bet the farm that they were going to have to make an eventual transition to net zero.
“And so while there was a lot of talk that occurred around sustainability and the movement towards zero emissions, no one was really legitimately willing to invest in it.
“If you look at that 10-year period versus the last three or four years, the progress has been massive. That progress has been a direct result of both parties tangibly making financial investment: mining houses investing jointly with OEMs, and OEMs making the conscious decision and showing it financially of breaking away from their traditional business model of diesel internal combustion engines into a new paradigm.
“So I think that those collaborations have manifested themselves in the form of tangible financial partnerships, not just conference conversation.”
Boltano said current battery technology did not allow for mining fleets to “operate at par with their diesel equivalents”.
“Battery fleets today, despite all the efforts, are certainly less productive due to lower rates of utilisation,” he said.
“[However], we are 60-plus years into the use of diesel engines on large mining trucks and while we certainly have come a long way even today the major engine OEMs face challenges on their products, operating in mining trucks.
“So I think we can certainly expect that battery technology has a long way to go, not just its ability to hold charge longer and to have greater power output, but also its reliability and durability.”
Haak said battery chemistries were evolving fast.
“We’re launching with LTO batteries – lithium titanium oxide – which have a way longer life cycle than the batteries you would see in an EV. And there are folks here, as part of this conference, with evolutions of that chemistry,” he said.
“There are specialist chemistries that really look like … they really fit the industry well.
“And so when you’ve got that chemistry right you’ve got to [get the right] trade-off between how much energy is stored on the machine and how much you want to impact the payload.
“That is a really fascinating discussion that we spend a lot of time on.”
Hendricks said: “Five years ago I personally would have thought the chances of seeing a battery electric vehicle in five years at 240-ton truck plus 200t of base machine – to electrify this with a battery – was unthinkable.
“So I think we need to applaud how far we’ve come with what’s known today.
“There’s no reason not to believe this momentum won’t persist and is going to drive more research.
“I would think that the chemistry will be very different five years from now.”
