Paving the way for green hydrogen in the mining sector

21 March 2023 3 min. read

A new study analysing the risks and rewards of mining companies shifting to the use of green hydrogen suggests the change could help firms bring in new revenues – with the fuel accounting for as much as one-fifth of energy demand by 2050. But the potentially explosive nature of the material means companies will need to build holistic risk management systems, if they are to safely enjoy its rewards.

Also called renewable hydrogen, green hydrogen is obtained by electrolysis of water. What makes the process ‘green’, in comparison to the traditional extraction of hydrogen, is that it is powered entirely by renewable energy – so it generates no polluting emissions, making its use a key component of the transition away from carbon-based fuels.

However, the realisation of green hydrogen as a mainstream energy source is some way off currently. To replace the ‘dirty’ hydrogen used now in refineries, fertiliser and chemical plants, previous research has indicated that almost double the electricity produced by every wind turbine and solar panel worldwide would be required. That would be before green hydrogen could be used for anything else, such as steelmaking, transport or heating.

Simplified illustration of green hydrogen production and use at a mining operation

Despite this, a new study from global risk consultancy dss+ suggests that if companies push ahead with green hydrogen projects, the economic and ecological benefits could be huge. The firm found that in mining operations alone, the adoption of green hydrogen could dramatically reduce greenhouse gas emissions, by replacing diesel fuel in hauling vehicles – currently contributing between 30% and 80% of a mine’s emissions footprint.

At the same time, the creation of green hydrogen is estimated to account for between 12% and 20% of global energy demand by 2050. This presents substantial additional business opportunities for mining companies willing to engage.

dss+ Director for Australia and New Zealand, Andrew Wilson, said, “Green hydrogen certainly shows great promise in helping to deliver an environmentally and economically sustainable future for mining companies. Its use cases extend far beyond simply fuelling heavy trucks.”

dss+ Business Transformation Framework

But to realise great rewards, companies will also have to brave great risks. Wilson warned that companies would need to appreciate a range of factors, not only including the technicality of converting an entire truck fleet – but also a raft of safety concerns. Ultimately, only a “holistic organisational approach” can see organisations realise the benefits of green hydrogen. The report’s authors include dss+’s global experts, Wilson, and ANZ Head of Mining and Metals, Wes Austerberry, who have been working with clients around the world to realise just such an approach. As a result, the study concludes by outlining five best-practices which can help yield the best results in the field.

First, organisations need to be aware that introducing large quantities of hydrogen to their operations may increase exposure to events such as fires and explosions, and plan accordingly. Leading on from this, firms must remain abreast of the latest technological developments in hydrogen, to help with transformation goals.

Third, while green hydrogen is currently expensive, firms can take advantage of capital projects looking to push forward its development – helping them to scale efficiently, and safely. Meanwhile, companies need to make sure they have a high level of supply chain integrity, to safely produce and handle hydrogen across their whole asset lifecycle – necessitating a thorough review of governance and safety policy throughout an organisation’s ecosystem. And finally, this means organisations need to start building bridges with trusted partners and suppliers, through which they can build capacity for a value chain that is still in its infancy – quickly, and securely.