Charting a Path to Sustainable Critical Mineral Procurement
As global demand for sustainable materials surges, Chile, a leading player in the copper mining industry, is at a pivotal point.
ABB, a global powerhouse in electrification and digital technologies, has teamed up with Codelco, Chile’s state-owned mining giant, to drive Chilean copper mining towards a more sustainable future.
This collaboration aims to reduce carbon emissions and strengthen mining’s role in supporting the world’s renewable energy goals.
As the world’s largest copper producer, Codelco has a considerable impact on global markets.
The company’s annual production of around 1.6 million tonnes of copper supplies critical materials for electric vehicles and renewable energy infrastructure.
Codelco's collaboration with ABB, announced at the 2024 MINExpo in Las Vegas, aims to implement advanced electrification and automation solutions to move Chilean mining operations closer to achieving net-zero emissions.
The focus on decarbonisation in mining has opened doors for significant improvements in procurement, as sourcing sustainable resources and technologies becomes a focal point.
Electrifying mining operations: ABB's eMine solutions
The initial focus of ABB and Codelco's collaboration centres around electrifying mining equipment and integrating digital tools to improve efficiency.
ABB’s eMine portfolio offers the infrastructure needed to support a comprehensive shift to electric-powered equipment. This includes essential elements such as charging infrastructure, battery management systems and efficient power distribution — all designed to reduce mining's on-site emissions.
A key component of eMine's contribution is the electrification of Codelco’s vehicle fleet, replacing the conventional diesel-powered trucks and machinery with EVs and machinery, significantly cutting Scope 1 emissions.
This electrification effort aligns with Codelco’s 2019 sustainability roadmap, which outlines ambitious goals to reduce the company’s carbon emissions by 70% by 2030.
Beyond electrification, ABB’s digital technologies will enable real-time monitoring and optimisation of energy use, equipment performance, and resource consumption.
These tools allow mining sites to operate more efficiently while generating less waste, which not only benefits the environment but reduces costs associated with energy consumption.
According to Nicolás Rivera, Codelco’s Vice President of Mining Resources, Development and Innovation, this collaboration is a strategic move: “We have conducted site visits and technology discussions. This announcement formalises our intention to accelerate decarbonisation efforts."
Procurement's role in decarbonising Chilean mining
For procurement professionals, decarbonising mining sites involves far more than simply adopting new technologies.
A strong procurement focus on renewable energy sourcing, sustainable transportation, water management and responsible critical minerals sourcing is vital to reducing carbon footprints in mining.
Sourcing renewable energy is one of the most effective ways procurement can help decarbonise mining operations.
By establishing Power Purchase Agreements (PPAs) with renewable energy suppliers, Chilean mining companies can secure green energy and decrease Scope 2 emissions. Investing in on-site solar or wind power installations also contributes to long-term energy stability and cost savings.
Transitioning to electric and hydrogen-powered mining equipment can also significantly reduce carbon emissions.
However, as the demand for these technologies increases globally, procurement faces challenges, from managing supply chain disruptions to competing for limited resources.
Chile’s rugged landscape and remote mining sites also pose challenges in deploying electric-powered machinery, which procurement teams must address when selecting and negotiating with suppliers.
Chile’s mining operations also often face water scarcity challenges. Procuring water-efficient technologies, recycling systems and desalination technologies addresses both sustainability and operational risk.
With water scarcity projected to increase in the coming years, procurement strategies that prioritise resource-efficient technologies contribute to a more resilient mining operation.
As a critical mineral supplier, Chile faces both opportunities and pressures from global demands.
The copper, lithium and other essential minerals sourced from Chile are integral to many green technologies, including electric vehicles and renewable energy infrastructure.
For instance, Tesla, a major player in electric vehicles, sources lithium from Chile to ensure a stable supply for its lithium-ion battery production.
Chilean procurement teams are tasked with managing volatile supply chains for these minerals.
Strategies may include establishing long-term contracts, fostering direct supplier relationships and even considering vertical integration.
To secure access to these minerals amidst rising competition, procurement teams must also adapt to changing regulations and demand more transparency in supply chains.
Digital twins and process automation: Enhancing operational efficiency
Another pillar of ABB and Codelco's collaboration involves digital twins and process automation.
Digital twins are virtual models that replicate physical mining operations, allowing operators to test and optimise processes without disrupting live operations.
ABB has previously implemented digital twins in other mining projects, proving their effectiveness in enhancing operational efficiency, predictive maintenance and safety standards.
For example, Codelco’s Chuquicamata mine, which is transitioning from open-pit to underground mining, will benefit from such innovations, as digital twins offer valuable insights into optimising workflows and predicting potential maintenance needs.
This contributes to safer, more efficient mining operations and reduces energy wastage across Codelco’s sites.
Collaboration is key
While decarbonisation is challenging, ABB and Codelco's partnership showcases how collaboration can drive impactful change.
By combining Codelco’s extensive mining knowledge and ABB’s technology, the partnership strives to produce greener copper while ensuring consistent supply to meet global demand.
Joachim Braun, ABB’s Division President of Process Industries, emphasises: “Quality reserves are becoming harder to reach. Digitalisation, automation and electrification maintain supplies for the current energy transition.”
Procurement’s role in this process remains indispensable. By prioritising renewable energy sourcing, sustainable transportation and responsibly-sourced minerals, procurement can drive significant reductions in emissions and promote a more resilient and sustainable mining sector in Chile.
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