Fortescue, an Australian mining company, has announced plans to invest US $6.2 billion during the rest of this decade to remove fossil fuel power sources entirely from its iron ore mining operations. The company says that this will enable it to avoid three million tons of carbon dioxide (CO2) emissions each year (roughly the same amount of CO2 emitted by flights leaving the US every day), as well as reduce its annual operating costs by $818 million.
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Fossil Fuels in the Context of Iron Ore Mining’s Total Environmental Impact
Iron ore – an essential resource for the steel, construction and manufacturing industry– cannot be extracted without causing environmental harm.
Mines tend to be open cast, significantly degrading natural environments. Surface runoff and leachate from iron ore mining and processing tailings pollute surface waters and groundwater.
Tailings often contain large quantities of SiO2, Si, Fe2O3, Fe3O4, Fe (OH), and trace amounts of harmful elements such as Hg, Se, Cu, Pb, Zn, As, and Mn. These can leach into the water and eventually pollute entire local habitats.
Ambient air quality is also significantly disrupted by iron ore mining. Blast operations, transportation, and other mining processes emit large quantities of dust that harm local animal and plant life and pose health risks to nearby human populations and mine workers.
Iron ore mines also consume a relatively high amount of fossil fuels for energy. This powers heavy-duty mining machinery and transportation, as well as generators used to power site operations. Burning fossil fuels for energy releases CO2 into the atmosphere and is a leading cause of climate change.
Can Fortescue Phase Out Fossil Fuels in Iron Ore Mining?
Fortescue says its plans to phase out fossil fuels from iron ore mining operations by 2030 will result in a CO2 emissions reduction of three million tons per annum – but is this possible?
One of the critical decarbonization benefits expected to come from the investment in fossil fuel-free iron ore mining is “the ability to commercialize decarbonisation technologies,” according to a Fortescue press release.
In other words, Fortescue’s business planners expect the company’s $6.2 billion investment in decarbonization to drive technological innovations – and encourage innovators to bring them to market – that will make eradicating fossil fuels from iron ore mining possible in the next few years.
This process is already underway. Fortescue Executive Chairman, Dr Andrew Forrest, said:
“We are already seeing direct benefits of the transition away from fossil fuels - we avoided 78m liters of diesel usage at our Chichester Hub in FY22 - but we must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen.”
The company also recently completed a 100-day internal “sprint” challenge, resulting in the development of the world’s first hydrogen-powered mining truck.
Hydrogen can be a carbon-free fuel source capable of powering heavy industrial machines such as those employed in mining – but only if it is made using renewable energy sources. This is referred to as “green hydrogen”, and currently represents less than one percent of all hydrogen fuel produced worldwide.
Fortescue’s newly announced investment is mainly planned for the 2024/25 financial year. It will include deploying an extra two or three gigawatts (GW) of renewable energy, generating capacity and battery storage across the company’s sites. This significant spending period will also see the company begin investing in a “green mining fleet,” which will replace existing fossil fuel-powered assets in alignment with the planned schedule.
Alongside the investment announcement, Fortescue also announced that it would task the Science Based Targets Initiative (SBTI) with verifying and auditing emissions reductions over the next few years. This will ensure independent verification and support the company’s aims to be an influential industry leader in decarbonization efforts.
Phasing Out Fossil Fuels Has Economic and Environmental Advantages
The investment will also have economic advantages, Fortescue says. By 2030, the company expects to achieve net operating cost savings of $818 million yearly. At prevailing market prices for diesel, gas, and carbon credits (which Fortescue could sell through Australia’s carbon credits scheme), the company will achieve a return on its $6.2 million investment by 2034.
Dr. Forrest said:
Consistent with Fortescue’s disciplined approach to capital allocation, this investment in renewable energy and decarbonisation is expected to generate attractive economic returns for our shareholders through energy cost savings and a sharp reduction in carbon offset purchases, together with a lower risk cost profile and improvement in the integrity of our assets.
Fortescue’s investment may signal a new era in sustainable heavy industry. Sectors such as mining, shipping, and construction are often criticized for the significantly harmful practices that they rely on, and these practices are largely harmful due to the excessive amounts of carbon needed to power massive-scale operations, including extracting resources, moving container ships, and manufacturing building materials such as concrete and steel.
The economic rewards Fortescue expects from its investment could catalyze more green investment from heavy industrial firms. This could drive down the price of green technology, enabling more investment and a higher adoption rate across the global economy.
More on Green Mining: How is Green Hydrogen Being Used in Mining?
References and Further Reading
Fortescue announces execution plan for industry leading decarbonisation. (2022) [Online] Fortescue. Available at: https://fortescue.com/ (Accessed on 23 September 2022).
Fortescue plans $6.2bn investment to eliminate iron ore emissions. (2022) [Online] Mining Technology. Available at: https://www.mining-technology.com/news/fortescue-investment-iron-emissions/ (Accessed on 23 September 2022).
Gleekia, A. (2016). Impacts of Iron Ore Mining on Water Quality and the Environment in Liberia. [Online] ResearchGate. Available at: https://www.researchgate.net/publication/304580575_IMPACTS_OF_IRON_ORE_MINING_ON_WATER_QUALITY_AND_THE_ENVIRONMENT_IN_LIBERIA (Accessed on 23 September 2022).
How can metal mining impact the environment? [Online] American Geosciences Institute. Available at: https://www.americangeosciences.org/critical-issues/faq/how-can-metal-mining-impact-environment (Accessed on 23 September 2022).
Pilkington, B. (2022). How is Green Hydrogen Being Used in Mining? [Online] AZO Mining. Available at: https://www.azomining.com/Article.aspx?ArticleID=1705 (Accessed on 23 September 2022).
Tso, K. (2020). How much is a ton of carbon dioxide? [Online] MIT Climate Portal. Available at: https://climate.mit.edu/ask-mit/how-much-ton-carbon-dioxide (Accessed on 23 September 2022).