Andrew Philpott, director of strategic relations for Sandvik, focused on the impact of rising energy costs and the potential for carbon taxes, and the incentive these provide for rethinking mining from both equipment and methodology perspectives.  Aside from confirming that—from Sandvik’s point of view as well—mining has weathered the economic downturn relatively unscathed, he offered a warning about the way in which higher energy and carbon emission costs could affect the way the industry goes about its business.

“Energy and carbon costs are expected to increase, with the oil price once again becoming a significant factor,” he said.  In addition, “power prices are already an issue in some parts of the world,” with South Africa being a particular case in point as power supplies are being stretched to the limit.

In terms of its CO2 output, mining accounts for around 1.5% of global emissions, Philpott said, with about half of that total being fugitive. Not including smelting and processing, the principal emitters are hard-rock surface mining and underground coal production. However, taken on the basis of emissions per U.S. dollar of revenue, mining has a high CO2 emission intensity, fourth only behind the cement, utility and steel industries. Carbon charges have already been introduced in Europe, and are expected before long in both North America and Australia.

By 2025, he predicted direct or indirect carbon charges are expected to be in place globally, while within 10 years, energy and carbon costs will account for up to 50% of operating costs within the mining industry. In consequence, he noted, Sandvik is aiming to help close the energy-efficiency gap (the difference for mining companies between “business as usual” and the strategies needed to remain competitive) by developing new technologies that reduce energy consumption while making operations more efficient.

One point Philpott raised was while mining companies know how much energy they are using in total, they often do not know how it is being used within their operations. As a result, there is often unrecognized potential for energy savings.

Among Sandvik’s solutions is its compressor-management system for drill rigs.  Since only 30%–40% of the energy input to a drill’s compressor is used for breaking rock, applying an effective management system can significantly cut costs, he claimed. In one case study, savings of around 50% in fuel usage had been achieved, equivalent to more than 300,000 liters of diesel over a year, which in turn cut CO2 emissions by some 800 metric tons.

Longer-term, higher energy and carbon costs will lead to a revision of the break point between open-pit and underground bulk mining methods, with costs of block caving being some 11% lower than those for continuing open-pit mining at increasing depths and, hence haulage distances.  And, Philpott added, block caving infrastructure lends itself to increasing levels of automation, with Sandvik already having supplied semi-automated loaders to Codelco’s El Teniente and trucks to De Beer’s Finsch mines, as well as being in the process of installing a fully integrated underground transport system at Rio Tinto’s Northparkes.