Digitization can help mining companies improve ESG performance

10 January 2023 Consulting.us 4 min. read
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Achieving improved ESG performance is becoming ever more necessary for mining companies, and is creating an opportunity for companies to use an array of technologies to achieve these ends.

“I think mining companies have all come to the realization that market expectations of them to be a good citizen is an essential part of the journey,” said Keith Russell, global leader of energy transition at management consultancy Partners in Performance.

“There are very clear market stakeholder pressures from big funds, and others, and obvious pressures from a government and regulatory perspective as nations go on the pathway to decarbonization,” Russell said. “There's also a growing need desire from customers to be able to buy green metals.”

Keith Russell and Eric Powell - Partners in Performance

Pressures are not solely external, Russell noted. “Employees want to be part of a mining company that is green and socially responsible, and very clearly going down this pathway,” he said. “From all areas, there is significant pressure to decarbonize.”

Adopting more digitization is key to meeting these demands, however.

With many firms seeking to integrate more renewable energy into mine projects to lower greenhouse gas emissions, incorporating digitization could further increase efficiency and greening. “Digital is very valuable in understanding energy demands, and getting the mix right between storage and the grid,” Russell said.

Eric Powell, who heads the North American energy transformation team at Partners in Performance, concurs that digitization is necessary to improve grid management.

“When you think about the meter elements, being able to build some solar or renewable resource then understanding how it sinks to the grid, [using digital tools] gives mining companies optionality from a reliability perspective,” he said. “You just cannot pour power back onto the grid at will, without it having implications on reliability. That's why digitization is so critical when it comes to grid management.”

Digitization will allow systems to recognize patterns and flows from the power source to the mine, allowing the grid to quickly respond and also for the grid to be optimized, Powell said.

Employing digitization technologies also holds potential improvements for asset management and optimizing mining processes. “Digitization allows us to optimize the overall process all the way through – existing diesel trucks, grinding circuit, smelting circuit,” Russell noted.

“It allows us to understand the points at where we're consuming excess energy, understand the raw materials that are going into the grinding circuit, and adjust the circuit in a manner that produces optimum with minimum energy."

Using these tools, mining companies can often achieve a five to 10 percent reduction – and occasionally 15% – in energy use without changing the technology or the source of energy. “It's maintaining the same processes and using them optimally, which is a very significant digital opportunity,” Russell said,

Embracing more digital tools can also have a positive impact on fleet management. Making a dent in fleet emissions can only really happen if you have automation, and digitizing mine operations goes a long way to allowing that automation to happen.

“I think with underground mining, and the capacity to use battery-operated vehicles underground, the technology is in pretty good shape, and that ends up being cost-competitive,” Russell said.

“But in open pit, we’re still on a journey that has to happen from a technology perspective to deliver effectively on a zero-emissions machine. Another pathway, and the best solution, is to end up with smaller trucks, which only works if you have automation.”

Digitization can also help mining companies move forward on another aspect of ESG which may at times be harder to measure, social relations.

But digitalizing these processes can even improve this aspect, Powell said. “It gives the community more transparency as to what's going on, and how all the moves towards decarbonization are providing benefits to communities.”

Adopting a more digitalized approach can also help with closure issues, Powell noted. During closure, if a company needs to invest in carbon offsets, having digitized its operations will play “a huge part in that process,” Powell said.

“With carbon credits, there's a mine that has committed to reducing an X amount of carbon, and wants to invest in a renewable project or nature-based solution where, for an example, a forest will never be harvested.

“What is required is evaluation, verification, and measuring. To calculate the carbon offset, you'll take a sample growth pattern in a forest, look at the canopy, and use artificial intelligence to identify carbon absorption and extrapolate it over the whole area, to set the baseline.”

Digital tools will also be used for tracking and verification. “For mining companies navigating multiple reporting schemes, having to report through multinational organizations, you have to report the right way to meet targets,” Powell added, emphasizing that digitization was the only way to accomplish this.