Australia's Fortescue announces electric drills deal

: Emissions, Metals
25/04/16

Australian iron ore and energy company Fortescue has announced a A$350mn ($222mn) deal with Swedish firm Epiroc to buy over 50 electric drill rigs aimed at reducing emissions at its iron ore operations in Western Australia (WA).

Fortescue expects the drills to reduce annual diesel consumption by around 35mn litres once it fully replaces diesel-powered equipment by 2030. The new fleet will cut more than 90,000t of CO2 emissions annually, Fortescue Metals chief executive officer Dino Otranto said on 16 April.

The fleet includes autonomous electric platform and contour drills, and the first equipment arrived at Fortescue's Solomon mine in early April.

The deal is part of the company's plan to replace its diesel-powered equipment by 2030. It signed a $2.8bn deal with Swiss-German manufacturer Liebherr in 2024 for a battery-powered truck fleet for its mining operations.

Fortescue plans to replace around 800 pieces of heavy mining equipment with zero emissions equivalents and deploy 2-3GW of renewable energy and battery storage across the Pilbara region by the end of this decade, Otranto said.

Fortescue is currently building a 190MW solar farm at its Cloudbreak mine, which will reduce annual diesel consumption by a further 125mn l.

Safeguard mechanism results

The company reported covered scope 1 emissions of 1.96mn t of CO2e across seven facilities in the first compliance year of Australia's reformed safeguard mechanism, which was just over 100,000t of CO2e above a combined baseline of 1.85mn t of CO2e.

Facilities earn Safeguard Mechanism Credits (SMCs) under the scheme if their emissions are below baseline or must surrender Australian Carbon Credit Units (ACCUs) or SMCs if emissions are above the threshold.

Fortescue earned 49,749 SMCs for its Solomon Power Station and surrendered the units across four other facilities that exceeded their baselines. It also surrendered 57,753 ACCUs, while two of its facilities — the Christmas Creek Mine and Eliwana Mine — will have to manage a combined excess of 49,382t of CO2e in future under applications for multi-year monitoring periods (MYMP), which allow eligible facilities to report under the safeguard scheme for periods of up to five years (see table).

Fortescue expected to exceed emissions baselines by around 120,000t of CO2e in the 2023-24 year, it said in 2024.

ACCU generic, generic (No AD) and human-induced regeneration (HIR) spot prices have remained below A$35 ($22) over the past two months, having declined steadily from mid-November because of lower buying interest from safeguard companies and strong SMC issuances.

By Juan Weik and Susannah Cornford


Fortescue's 2023-24 safeguard mechanism results						t CO2e
Facility	Covered emissions	Baseline	ACCUs surrendered	SMCs surrendered	SMCs issued	MYMP net position

Solomon Mine	452,137	390,033	42,926	19,178
Solomon Power Station	316,859	366,608			49,749
Christmas Creek Mine	372,251	351,986				20,265
Cloudbreak Mine	295,132	267,459	8,411	19,262
Rail	254,871	241,706	4,002	9,163
Eliwana Mine	164,894	135,777				29,117
Iron Bridge Mine	104,560	100,000	2,414	2,146
Total	1,960,704	1,853,569	57,753	49,749	49,749	49,382
Source: Clean Energy Regulator

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