Australia’s mining industry stands at a crossroads: it has the potential to dramatically cut operating costs and carbon emissions by shifting to electric fleets, but a lack of policy support and high upfront costs are slowing progress. The latest report from the Electric Mine Consortium (EMC) highlights the massive benefits of electrification, with electric mines potentially operating at costs 56% to 88% lower than traditional diesel-powered sites. However, despite these advantages, only 60% of mining operations in Australia are planning to make the switch to electric fleets.
One of the biggest challenges? The high capital costs of adopting battery-electric vehicles (BEVs), which 76% of miners cite as the main barrier. This issue is compounded by the lack of supportive policies. Unlike Canada, which offers a 30% capital tax write-off for electric equipment and clear air quality standards, Australia has no carbon tax and maintains a diesel fuel tax credit that will cost taxpayers $37 billion between 2024 and 2030. This creates a major disincentive for mining companies to invest in cleaner technologies.
For example, companies like BHP have committed to electrifying their Chilean fleets by 2030 but have delayed any significant plans for Australia until after 2030. The report also notes that Australian miners face regulatory challenges—such as ventilation regulations that don’t account for the lower emissions of electric equipment, preventing companies from fully reaping the health and cost benefits of electrification.
However, the EMC report outlines the potential for substantial savings and health improvements. Fully electrified mines can reduce Scope 1 and 2 emissions by 100%, cut energy costs by 50%, and lower ventilation and maintenance costs by up to 30%. These figures highlight the urgency of adopting electric fleets, not only for financial reasons but also for worker health, as diesel particulates pose severe risks like lung cancer, especially in underground operations.
The mining industry is now urging the Australian government to step up with tax incentives and policies that will accelerate the transition. EMC Chair Graeme Stanway emphasised that electrification isn’t just an economic opportunity but a health imperative, with the power to eliminate diesel hazards while supporting Australia’s sustainability goals.
The message is clear: without stronger government support and clear policy direction, Australia risks falling behind in the global shift toward greener mining practices.
Source: International Mining.
