The mining industry is set to move from diesel fuel to electricity to power their operations. But this massive energy shift has created a significant paradox. While the shift is necessary to meet long-term sustainability standards, which are no longer elective but now a requirement, moving entire fleets to battery-powered operations comes with expensive, complicated hurdles.
The challenge is not just procuring electric vehicles, but engineering the robust infrastructure and data integration systems required to power them without compromising productivity.
In practice, this shifts the challenge from equipment replacement to system integration, where power distribution, charging infrastructure, and real-time data control must operate as a unified ecosystem to maintain performance at scale.
Decarbonising the Mining Sector
The push to electrify mining operations represents a monumental shift that will require a complete reimagining of mine-scale energy grids.¹ The Australian mining sector is highly energy-hungry, consuming roughly 500 petajoules per year, which accounts for 10% of Australia’s total energy use.² Currently, the industry relies heavily on fossil fuels, with diesel alone accounting for 41% of its energy consumption.³
Reimagining the Grid
Transitioning away from diesel to electric alternatives means electricity demand is expected to skyrocket.⁴ For example, replacing 27 diesel haul trucks and auxiliary equipment with battery-electric versions at a sample open-pit iron ore mine could cause its electricity demand to more than double.⁵ Across the global iron ore industry, fleet electrification would require an additional 20 to 30 terawatt-hours of electricity, necessitating between $30 billion and $45 billion in capital expenditure for power infrastructure alone.⁶ To support this massive load, miners must upgrade electric-grid connections, construct new on-site substations, and install or contract large-scale renewable power capacity.⁷
What were once considered microgrid challenges are rapidly evolving into macro-scale infrastructure questions. As operations electrify at scale, the integration of generation, storage, and load management becomes a central engineering challenge — not just a power supply issue.
Change in the Industry
We are already seeing the beginnings of this transition in Australia.⁸ Fortescue has deployed Australia’s first newly built electric excavator at its Cloudbreak mine, while another excavator at its Chichester operations runs partially on solar power, supported by a 6.6kV substation and more than two kilometres of trailing cable.⁹ Major players like BHP and Rio Tinto are collaborating with Caterpillar to develop zero-emission, battery-powered mining trucks, and mine operator IGO has partnered with ABB to study full electrification for its Cosmos nickel project.¹⁰
The Ups and Downs of the Energy Transition
However, executing these massive capital projects is becoming more challenging due to shifting economic headwinds.¹¹ According to KPMG’s 2025 Mining Risk Forecast, “Financial Risks” have surged to become the absolute number one risk facing the industry.¹² Higher interest rates and increased capital costs are creating financial strain, which could heavily burden the expensive, early-stage infrastructure development required for electrification.¹³ Despite these hurdles, the operational upside remains enormous: electrification could reduce energy costs by 40 to 70 percent and cut mobile equipment maintenance costs by approximately 30 percent, all while drastically reducing harmful exhaust emissions.¹⁴
As capital constraints tighten, the ability to optimise existing infrastructure through better integration, control systems, and data visibility will become just as critical as new investment.
Conclusion
The shift is actively underway in the industry. The focus must now move beyond the conversion of individual machinery to infrastructure change as a whole. Successful electrification will depend not just on new equipment, but on how effectively power, data, and operational systems are integrated.
A system-wide approach will be critical to reducing environmental impact while maintaining resilient, uninterrupted, and productive mining operations at scale.
References
- GlobalData, Australian miners power ahead with equipment electrification, 2024.
- GlobalData, 2024.
- GlobalData, 2024.
- McKinsey & Company, Mining electrification could double their electricity demand, 2023.
- McKinsey & Company, 2023.
- McKinsey & Company, 2023.
- McKinsey & Company, 2023.
- GlobalData, 2024.
- GlobalData, 2024.
- GlobalData, 2024.
- KPMG, Australian Mining Risk Forecast 2025, 2025.
- KPMG, 2025.
- KPMG, 2025.
- GlobalData, 2024; McKinsey & Company, 2023.
