Eltirus

Overview

Sustainability is increasingly the focus of investors and the community alike. Increased cost of capital and public outrage expressed against companies with poor ESG records are becoming more and more common and there is an ever increasing demand not only action to be taken but to ensure that companies have a clear plan. A recent article in the Australian Financial Review noted:

“ESG is likely to undergo a journey similar to workplace safety – change will only come from strong leadership, better processes and a fundamental shift in culture from the boardroom to the front line.” (AFR 30 Mar 2021).

Sustainability improvement is not an option

Sustainability improvement is not an option for any company – it is more a case of when these initiatives are wholeheartedly embraced, not if.

“A coalition of the world’s biggest investors will push companies to align capital spending with emissions reduction pledges after determining that none of Australia’s biggest emitters have climate targets fully aligned with the goals of the 2015 Paris Agreement.” (AFR 23 Mar 2021)

and per the Macquarie Bank 2020 ESG Ratings Report:

“The basket of companies with the highest ESG scores has outperformed the bottom basket since the inception of our survey in 2011. There is a strong relationship between revisions to ESG scores as a signal for future performance. Companies with the largest positive revisions to their ESG scores have delivered better returns than those with negative revisions, by 5.1% on an annualised basis.”

Decarbonisation of the quarry industry is being addressed by multi-national and local industry players alike to improve their performance and meet ever more stringent sustainability criteria.

Quarry sustainability is possible

Our experience shows that significant CO2 reduction is possible when an integrated approach is taken as shown below.

What can be done about it?

Emissions within quarrying can be broken down into three broad types:

• Scope 1 (from diesel)
• Scope 2 (from electricity generation)
• Scope 3 (from supply chain and transport)

Options to reduce Scope 1 emissions

Multiple efforts are required to address the main sources of emissions, including better resource definition and extraction planning, operational efficiency improvement, new drive-train technology and a switch to green electricity.

Improve resource definition and extraction planning

Probably one of the best ways to reduce Scope 1 emissions is simply not to dig up material that is not economic to extract. The use of resource optimisation and scheduling tools ensures that there is a viable extraction plan for the deposit that:

• Clearly identifies what is economic to extract and the stages to extract it
• Reduces overburden movement (and double-handling)
• Ensures that there is a clear picture of what areas need to have vegetation removed and which can to be rehabilitated
• Budgets not only operational and capital expenditure, but the estimated CO2 impact of the plan

The combination of Seequent’s Leapfrog Geo software for resource modeling and Deswik.Suite software for resource optimization, design and scheduling will have a profound impact on how we plan and extract deposits and maximize NPV.

You need to to baseline your extraction operations, work out how improved resource definition and extraction scheduling/planning will improve sustainability and provide estimates on how CO2 kg/tonne will be reduced accordingly.

Improve operational efficiency

Significant improvement in operational efficiency can be achieved in a range of ways such as:

• Providing a link between strategic resource planning and operational plans
• Ensuring that load and haul fleets are matched to production requirements
• Loading haul trucks to the correct payload
• Not double handling material
• Eliminating unnecessary idling and unproductive use
• Upgrading equipment to more fuel efficient models

Central to all improvement actions are the need for robust data collection and analysis through the use of an agnostic Operational Performance System that can pull data from a wide range of sources.

Being able to bring together the relevant data from the different data silos that most companies have, can provide profound insight into operations and when combined with AI and machine learning, will revolutionize how we view our businesses.

These systems also ensure that we can monitor emissions vs. plan and provide robust, auditable data.

Drivetrain advances

To become fully carbon neutral, a change in drive train technology is required. We believe that there is significant opportunity for the use of electric and particularly, electric autonomous haul trucks in quarries.

By way of example:

The Volvo CE Electric Site pilot conducted during a ten week period at a quarry in Gothenburg, Sweden as a partnership with construction company Skanska. The pilot included electric and hybrid autonomous vehicles and the resulted in up to 98% less emissions of CO2. 

More recently we have seen trials at Holcim’s quarry Gabenchopf in Siggenthal which we believe will lead to a significantly greater understanding of the value of this technology and how best to apply it.

We are actively involved in research and collaboration in this field with leading players in this field.

It is worth noting that work done to improve resource optimisation, extraction scheduling and detailed planning is a vital part of this evolution and one that we have now been working on for some years.

Sustainable fuels

Options exist for mobile equipment to switch to liquid sustainable fuels (biofuels or synfuels) with the potential to decrease carbon emissions by 70%, while using existing equipment and infrastructure.

Further opportunities exist to power equipment by hydrogen, with the first hydrogen powered road trucks arriving in Australia this year and a hydrogen powered drill rig and large haul truck already in testing with Fortescue Metals Group.

Options to reduce Scope 2 emissions

The processing of material requires a significant amount of energy. Whilst this can be offset with “green electricity”, true reduction will require a difference approach.

Better identification of material that should be processed

A good understanding of site geology can have a big impact on Scope 2 emissions – in short, material that is marginal is identified before processing and not put through the plant – this can have a significant impact, particularly for sand operations.

A reassessment of the cost of roadbase

Many sites produce roadbase at near cost, often using high quality rock in the process. If a carbon tax is put in place, this practice will need to change as companies will be forced to either increase prices or not produce these materials. This is likely to drive changes in pavement design as sites only produce roadbase from materials that are not suitable for high quality aggregates or as needed to maintain site development.

Reduction in the use of mobile crushing plants

Mobile crushing plants, particularly diesel powered ones are likely to fall from use as the cost of CO2 emissions preclude their use, resulting to changes in how low value products are produced and how these plants are used to supplement regular production.

Summary

Once baseline CO2 emissions are determined, actionable plans to predict and reduce emissions are required. Digitalisation of operations is a critical part of how we see the industry changing, namely:

1. Digital Twin of the extraction operation that provides accurate survey, geological, geotechnical and quarry design information.
2. An Optimized Resource based on geological and market data to maximize NPV and guide extraction
3. A robust Quarry Operating Plan to ensure planning results in front-line outcomes. This needs to be appropriately resourced with the technical team to manage it, the needed software and the geospatial tools such as Trimble Stratus, drill rig hole navigation systems, machine guidance and GPS survey equipment.
4. Operational Performance Systems to provide stakeholders with actionable insights to control and correct operational performance. Having accurate, validated, and timely data opens the door to machine learning, artificial intelligence and better decision making.
5. Autonomous and electric machines to significantly reduce emissions, increase efficiency and improve safety Note that it will be difficult (some would say impossible) to reap the benefits of this technology without first having first implemented the preceding four steps.

There are solutions to help move quarries to net zero. These initiatives will not only improve sustainability, they will reduce operating costs as well, making them self-sustaining.

For more information, please contact Steve Franklin on steve.franklin@eltirus.com or +61 474 183 939.