Meaningful decarbonisation happens at every stage of the mining lifecycle. AECOM shares what this means for the Australian resources industry.
As the resources sector evolves, each stage of the mining lifecycle is looking for ways to reduce emissions and meet sustainability targets.
It’s one thing for a resources company to want to decarbonise its operations; it’s another to understand and implement appropriate measures to achieve stated emission reduction commitments.
AECOM industrial decarbonisation lead Dane Noble told Australian Mining while the end goal of net-zero operations can be daunting, there are many options that are relatively straight forward and practical to implement whilst being economic with current technology and posing minimal operational impact.
One such example is the procurement of renewable energy via power purchase agreements (PPA) which can significantly reduce emissions associated with an operations’ or a collective group of assets’ electricity supply.
“Renewables are by far the cheapest form of bulk energy in Australia, but the challenge for sites that aren’t grid connected is they typically operate from systems powered by traditional fossil fuel-based generation in the form of a diesel or gas fired power station,” Noble said.
“For these off-grid sites, decarbonising electricity supply is more complex given the requirements for self-firming any integrated renewable generation which are typically highly variable. Hybrid systems are advancing with grid-forming batteries able to provide both the firming component as well as shift energy to periods of low solar or wind.”
The Federal Government has set a target of 82 per cent renewable electricity generation and 43 per cent overall emission reduction nationally by 2030. The Clean Energy Regulator predicts that renewable penetration in the national electricity market (NEM) could reach between 44 and 46 per cent this year.
“When you combine a battery with solar and wind, you can – in certain parts of Australia – reach 80-90 per cent renewable penetration economically,” Noble said.
Regardless of whether a site is grid connected or islanded, PPAs can be an excellent avenue as they remove capital expenditure from the miner’s balance sheet and shift it to the developer.
In return the miner receives a reliable, low cost, low carbon source of electricity supply funded via operational expenditure and without taking on project development risk in energy infrastructure, which is typically not core-business.
Some recent examples of this include BHP’s PPA with Neoen for 50 per cent of electricity supply for its Olympic Dam operation and Rio Tinto’s spate of announced PPAs to power the major’s east coast aluminium operations.
“PPAs are really important for not just the mining sector, but also the energy sector because they underwrite the project development and provide confidence to invest via the security of a primary offtaker, so it serves both purposes,” Noble said.
Whether a mining fleet being used can be electrified is also contemplated.
“I think fleet transition away from diesel to either battery electric, hybrid, bio or renewable diesel fleets for most mining applications will become not only technically viable, but economic in the next five to 10 years, and hopefully we see whole sites really start to transition,” Noble said.
If a site’s electricity and fleet emissions have been electrified, the next emission sources to tackle could include stationary energy fuel replacement in areas such as process plants, heat exchangers and heat boilers.
While direct process emissions remain as one of the biggest challenges with current technology, progress is still being made.
“When approaching decarbonisation options at a site or group of assets, one way to assess your options is via a marginal abatement cost curve (MACC), which looks at all your emission reduction options and ranks them based on emission reduction potential (usually in tCO2-e) and marginal cost per tonne of CO2-e abated,” Noble said.
“When an option sits below the X-axis that option offers positive Net Present Value, which means it provides both cost savings over the baseline as well as its emission reduction benefits.
“The ones that sit on the opposite end of MACC curve or above the X-axis typically have technology that’s not as mature or more complex to implement.”
AECOM helps its clients look at the broader picture, outlining all their decarbonisation options and risks by detailing what it means for their current emissions profile.
“We provide services across the whole of an asset life cycle, from advisory services such as assessing decarbonisation options, right through to asset decommissioning and closure,” Noble said
“Our preference is to be involved right at the front end and provide an end-to-end solution that looks at all options and tailors those options to what’s best for our client, the site, and other key value drivers.”
Considerations include factoring in the latest policy changes at State and Federal levels, the type of mines the client operates, the location of the sites, and factors associated with safety and operational readiness.
“I think what our clients need is a clear policy outlook they can work towards, and it’s up to governments to provide that landscape,” Noble said.
“With policy, generally you’ve got either the carrot or the stick approach. Not saying that either is right, but it needs to be measured. If policy can bridge the gap and act as a nudge for the industry to take a final investment decision on a novel decarbonisation approach, we’ll see a snowball effect follow from the rest of industry.”
In any industry, adaptability is key. And that is exactly what several major miners are doing so they aren’t left behind in the global energy transition.
“As a sector more broadly, we are leaning into ESG heavily, including decarbonisation,” Noble said.
“Australian miners are taking it seriously by investing and leading from the front. While some investments may not deliver immediate economic benefit, they know it’s important to their shareholders and offers more than just economic returns including social value, governance and sustainability.
“It’s corporate responsibility and it’s the right thing to do.”
This feature appeared in the June 2025 issue of Australian Mining.
