BHP turns to renewables for nickel mine that may supply Tesla, starting with solar and battery

BHP has inked a new deal that will see renewable electricity generation integrated into the power supply for its Nickel West operations in W.A., including solar, wind and energy storage technologies.

The new deal, a 15-year power purchase agreement with Southern Cross Energy, extends the current arrangement between the two companies to 2038, and paves the way for BHP to supply “sustainable nickel” to its customers, which could soon include US EV and battery giant Tesla.

BHP said “study phases” for renewables supply and emissions reduction under the extended PPA were already underway, including an 18.5MW solar and battery system at Nickel West’s Leinster and Mount Keith operations.

A 17MW waste heat steam turbine system was also being evaluated at the Kalgoorlie Smelter, as a way to provide low-emissions electricity from furnace heat recovery.

Nickel West asset president Eduard Haegel said that those projects had the combined potential to reduce the miner’s Scope 2 electricity greenhouse gas emissions by up to 15 per cent by 2023, based on 2020 levels.

“These projects contribute to the first phase of our emissions reduction strategy, as we continue to evaluate plans for additional renewable energy supply to decarbonise our nickel operations,” Haegel said in a statement, suggesting there might be renewable energy offtake deal in the works too.

“We are at the beginning of an energy revolution that will transform our world and materially increase demand for nickel. BHP Nickel West is well placed to provide our nickel units sustainably, and with one of the lowest carbon footprints.”

Having a sustainable product to offer will be key in BHP’s bid to establish itself as a primary supplier of materials to the ready-to-boom battery and electric vehicle markets.

As RenewEconomy reported here last month, the miner has already started to boost nickel production after Tesla CEO Elon Musk issued a call for miners to ramp up output of the key material used in the company’s batteries.

“At Tesla’s recent battery day, Elon Musk flagged the enormous demand that will come for nickel as this decade unfolds,” Haegel told the recent Diggers and Dealers forum in Kalgoorlie.

“His call for nickel miners to grow quickly offers real evidence of the place nickel has as a strategic battery metal going forward.”

This week, Haegel noted that the company’s integrated value chain and the sulphide nature of its nickel deposits already gave Nickel West “a global advantage in the sustainable production of nickel.”

The move to renewables in its Western Australia operations also fits with BHP’s commitment to a science-based target of a 30 per cent reduction in carbon emissions from 2020 levels by 2030, with a long-term target of net zero operational emissions by 2050.

Last month the global resources giant signed a five-year contract that will see it source wind and solar to deliver up to half of the power needs for its coal mining operations in Queensland – its first big renewable energy off-take agreement in Australia.

And last year, BHP decided to switch to 100 per cent renewables for its huge copper operations in Chile from the mid 2020s, and to cancel the existing contract from a coal generator in that country.