As Customer Demands Shift, Some Mining Companies Transition to Renewable Energy Sources

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Sparks illuminate the air while an employee, donned in a heat-resistant suit, manipulates a lengthy metal rod to encourage the molten metal out of a crucible in a nickel smelting facility on Sulawesi Island, Indonesia.

Managed by the global mining conglomerate Vale and fueled by hydroelectric power from a trio of dams, the smelting operation produces 75,000 metric tons of nickel annually. This nickel is a critical component for batteries, electric vehicles, household appliances, and numerous other goods.

Although the smelting process itself emits a considerable amount of greenhouse gases, the facility’s use of hydroelectric power offers a cleaner energy alternative. Such mitigations are becoming increasingly important as the world accelerates its transition to renewable energy, boosting demand for critical minerals like nickel and cobalt.

A report from global consulting firm McKinsey & Company reveals that mining activities contribute between 4% and 7% of worldwide greenhouse gas emissions. To address this, some mining firms have begun transitioning away from fossil fuels for their extraction and refining processes. This change has been partially instigated by downstream customers seeking more sustainable supply chains.

Located beside a pristine lake in the verdant jungle of Sorowako, South Sulawesi, Vale Indonesia—a subsidiary of the global Vale corporation—operates its smelting processes entirely using hydroelectric power. This allows the company to reduce its carbon dioxide emissions by over 1.115 million tons annually when compared to diesel usage. Vale states it has cut its greenhouse gas emissions by nearly one-fifth since 2017.

As the global need for renewable energy components like batteries and solar panels rises, so too will carbon emissions from the mining sector, unless deliberate steps are taken to decarbonize. A combination of technological advancements, customer pressure, and policy enforcement is required to promote more sustainable mining while simultaneously meeting increasing global needs.

Other mining operations globally are also adopting renewable energy sources. For instance, solar energy facilities in Chile are contributing to the nation’s mining sector, which is a major consumer of electrical power for the extraction of copper, lithium, and other critical minerals. Canada’s Raglan Mine has turned to wind power in recent years.

Michael Goodsite, a pro-vice chancellor and professor of civil and environmental engineering at the University of Adelaide, notes that companies are learning from the environmental shortcomings of the industrial revolution, when fossil fuels were the dominant energy source.

Despite these advancements, Vale Indonesia still relies partly on coal for specific operations, including powering its drying and reduction kilns. The company’s CEO, Febriany Eddy, has expressed intentions to switch these operations to liquefied natural gas (LNG), which, although cleaner than coal, remains a fossil fuel. Eddy justified this transition as a pragmatic step that could reduce emissions by 40%, given the limitations of current technology.

Switching to renewable energy also comes with significant initial costs. While the long-term benefits are notable—especially as global energy prices soar—the upfront investment required can be a considerable hurdle.

Aimee Boulanger, executive director of the Initiative for Responsible Mining Assurance, suggests that transitioning to renewable energy in mining could unlock green financing options and draw future investors more aligned with sustainability.

However, some regions, particularly in China, still adhere to less stringent sustainability requirements, opting for cheaper, fossil fuel-based methods, highlighting the role of consumers and investors in enforcing sustainable practices.

Transitioning away from fossil fuels in the mining sector will undoubtedly be an expensive endeavor, especially as nations like the United States look to domesticate the production of critical materials. As Goodsite remarks, if end-users demand sustainably sourced materials, a premium will inevitably be attached to those goods.

Big Big News’ climate and environmental coverage is supported by various private foundations. The AP holds sole responsibility for all content.

Frequently Asked Questions (FAQs) about Renewable Energy in Mining Industry

More about Renewable Energy in Mining Industry

• McKinsey & Company Report on Mining Emissions
• Initiative for Responsible Mining Assurance
• Vale Indonesia’s Sustainability Report
• Global Demand for Renewable Energy
• Environmental, Social, and Governance (ESG) Commitments
• Challenges in Transitioning to Renewable Energy in Mining
• Hydroelectric Power in Mining
• Investment in Renewable Energy Infrastructure
• Government Policies on Clean Energy
• Liquefied Natural Gas as a Bridge Fuel