According to the Clean Energy Australia Report 2022, the Australian renewable energy industry accounted for 32.5 per cent of Australia’s total electricity generation in 2021. As the energy transition and the uptake of clean and green energy gains pace, pressure mounts for high emission sectors like mining to respond to the growing environmental challenges that we face.
Gerard Daniels strongly supports the move towards green renewable energy, and has seen considerable change as mining clients shift their focus in this direction. Here Paul Howard, a Partner at Gerard Daniels, explains how many mining businesses are evolving their energy and ESG strategies, and how this transition is shaping the demands on business leaders.
Adapting mining operations to support the energy transition
Across the Australian mining industry businesses are making a significant commitment to invest in renewable energies and technologies. Many businesses are also scaling up the size and scope of their ESG teams, and devising new energy strategies and business streams to support this transition.
Fortescue Future Industries (FFI) – FMG’s renewable energy start up – is a great example of a rapid mining sector response to the energy transition. “In a very short period of time FFI has dramatically and now has an international brand and secured major offset agreements as announced in the press” Paul explains. “We’ve been working closely with FFI to attract the right talent, recruiting around the world to fill corporate, technical, project delivery and country manager roles to help lead this change.”
It has been reported that FFI founder and chair, Andrew Forrest, has also spent time in the UK meeting with the Prime Minister and private investors, lobbying to move away from blue energy and scale up the production of green hydrogen.
New energy strategies
Renewable energy, battery storage and other green innovations are also helping to diversify Australia’s energy mix, and support efforts to decarbonise mining operations and energy supply chains.
- A new microgrid at Gold Field’s Agnew mine in Western Australia allows wind and solar energy to supply more than 50 per cent of the site’s power requirements.
- At a new copper-nickel mine at West Musgrave in WA Oz Minerals will use renewables for 80 per cent of its energy needs, backed up by diesel or LNG generated on site.
- BHP has commenced its construction of the world's largest off-grid mining solar and battery energy storage system.
- Rio Tinto has also set its sights on renewables to diversify the energy mix. In December 2021 the mining giant announced a $10bn commitment to halve carbon emissions by 2030, constructing wind and solar energy plants to power some of its operations.
- And the most ambitious by far is FMG, to be fully carbon neutral by 2030.
“These are just some of the energy programs and initiatives being delivered as Australia’s mining sector ramps up its response to the green energy transition,” says Paul.
How are mining leadership roles changing?
To meet Australia’s longer-term emissions targets business must focus today on building the right teams, finding and developing the right leadership talent, and designing the right energy strategies to deliver on this change. Here’s how mining sector leadership roles are changing and evolving to address these and other industry challenges.
A broader focus for ESG
As the mining industry increases its environmental, social and governance (ESG) commitments, the nature of leadership roles must also change.
“To manage growing ESG responsibilities business leaders now have a much broader remit and require clearer vision and strategy,” says Paul. “Stakeholder communication and community relations have become an increasingly important part of these leadership roles, especially given the remote locations of many Australian mining operations, and the local and indigenous communities that support them.”
As the world sets about aggressively reducing carbon emissions it’s been difficult for the mining industry to maintain its social licence to operate. To address this issue, businesses are putting the focus back on developing a relatable employment brand and communicating, not just with shareholders but with the broader community.
“Mining businesses must now reposition themselves around helping to solve the future problems of the planet, not as being part of the problem,” says Paul. “This requires strong vision and leadership, and the roles we are placing are increasingly focused on this.”
Nickel and copper miner IGO has now successfully rebranded itself as a ‘technology metals supplier’ and surging demand for commodities like lithium and cobalt have helped other mining businesses to achieve similar feats. “We can’t build enough electric cars and batteries without these commodities, so we’re seeing a lot more focus on what it takes to sustain these supply chains.”
Operationally focused sustainability
Energy management was previously just a functional part of mining, but more sustainable mining businesses are now creating specialist power roles with a growing operational remit to develop and deliver on ESG (emissions) commitments and other strategies for the energy transition.
“Today when new mines are being built businesses are considering how they can supply energy sustainably to the site; if dewatering can provide water to local communities or to farming and agricultural industries; and whether mining tailings can be put to more sustainable uses,” says Paul. “Today businesses need a lot more governance to ensure mines operate sustainably, and that they can have a positive community and environmental impact.”
To discuss your unique energy leadership needs reach out today, or connect with your local Gerard Daniels team.