As Freeport converts mining trucks to green power, costs unclear
Copper mining giant Freeport-McMoRan Inc (FCX.N) is converting its fleet of diesel trucks and other machinery to electric or hydrogen power, a transition required to fight climate change even though the costs are not yet known, Chief Executive Richard Adkerson said in an interview at the Reuters Next conference.
The mining industry is grappling with its paradoxical role as supplier of copper, lithium and other building blocks for renewable technologies even as operations contribute to global warming.
Freeport, which operates mines in the Americas and Indonesia, has roughly 600 haul trucks – some of which move more than 400 tonnes (881,850 pounds) of dirt per load – and numerous other pieces of equipment.
To power those machines, Freeport bought 180 million gallons of diesel last year, according to regulatory filings, contributing to its so-called scope one (direct) emissions.
“We have to make investments to reduce carbon emissions,” Adkerson said in the interview released Wednesday. “We’re going to do that. It’s going to cost some money.”
The Phoenix, Arizona-based company is testing electric- and hydrogen-powered trucks and is studying other fuel sources for its coal-fired powered power plant in Indonesia, where it runs the world’s second-largest copper mine.
Freeport is also participating in the Charge on Innovation Challenge with Rio Tinto Ltd (RIO.AX), BHP Group Ltd (BHP.AX) and others to help better electrify mine sites.
It joined hydrogen fuel consortiums in South America and next year plans trial runs of diesel-electric trucks from Komatsu Ltd (6301.T) and Caterpillar Inc (CAT.N).
Energy accounts for roughly 20% of Freeport’s annual operational costs, though it is not clear yet how that could change once the entire fleet is converted, the company said.
“There will be an impact on supply as a result of converting all of this,” said Adkerson. “There are more questions than answers right now.”
But Adkerson, who has been CEO since 2003, said it was “absolutely necessary” for Freeport to curtail emissions. He cited extreme weather caused by global warming and the incongruity of copper mining creating emissions while the metal is needed for green energy solutions
“The world is going to need copper, and yet copper mining has emissions,” he said.
The International Council on Mining and Metals (ICMM), an industry trade group chaired by Adkerson, set a goal in October for all members – including Freeport – of net zero direct and indirect carbon emissions by 2050 or sooner, in part by retiring diesel-powered equipment.
Freeport is also studying ways to re-process waste rock at its mine sites to extract an estimated 10 billion pounds or more of copper. Adkerson said it is too soon to say how much copper could eventually be produced using this method, but added: “Our technical team is really excited about it.”
In Spain, Freeport is recycling electronic scrap waste at one of its smelters. The operation is not expected to become a major focus for the company, which prefers to focus on operating large mines, Adkerson said.
“That (copper) scrap will be needed because of what I believe is the coming real scarcity of copper,” he said. “We just don’t see (recycling) as a business opportunity for Freeport.”