The latest industry report released by Fitch Solutions shows that, in the near future, green hydrogen will have a crucial part to play in decarbonizing the metals and mining sector. Fitch, a market analyst, expects that in the mining industry, energy storage and transportation will be the main applications for the use of green hydrogen, especially with companies generating their own supplies of this fuel initially by purchasing the needed on-site components and systems.
Green hydrogen is simply hydrogen fuel that has been created using renewable sources. Currently, green hydrogen makes up a paltry 0.1% of the worldwide hydrogen market because its huge electricity requirements make its production very expensive.
The Fitch Power and Renewables team notes that electricity costs make up about 50% to 75% of the total cost of production of green hydrogen. However, Fitch notes that the downhill trend in the electricity costs of renewables are bound to benefit the future growth of the industry.
Fitch also insists that the utilization of green hydrogen could be one main factor to assist in the decarbonization of the metals and mining sector through its industrial production and transport applications. In addition to this, Fitch maintains that the increase in the utilization of green hydrogen could be beneficial to the metals and mining sector, which will grow based on sector players’ social approval to work in their communities as well as available financing alternatives.
Fitch adds that green hydrogen will see more frequent use to alter haulage fleets, and Anglo American is acting as the lead instigator in the metals and mining industry.
In 2019, Anglo American issued a statement announcing its joint venture with ENGIE, which entailed the co-creation of a mining truck that would be powered by green hydrogen. Toward the end of last year, the two companies announced that the needed electrolyser for the project had been shipped to the project site by Nel Hydrogen Electrolyser AS, and the truck launch was scheduled for this year at the company’s South African Mogalakwena mine.
Other green hydrogen projects are worth noting. Since 2015, Glencore has used a wind turbine and a hydrogen storage unit to operate its Canadian Raglan mine. Fitch also reported that Fortescue was party to a partnership with POSCO, a South Korean steelmaker, to generate green hydrogen, which the two companies entered into last year, while SHS-Stahl- Holding-Saar GmbH & Co. KGaA and Paul Wurth SA recently signed a memorandum of understanding with Rio Tinto Plc (NYSE: RIO) that would allow it to look into how pellets of iron ore could be transformed into hot briquetted, low-carbon iron through the use of green hydrogen.
The lead taken by these companies is likely to be followed quickly by other mining companies, a move that will cut the carbon footprint of this sector.
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