How Chile’s mining sector could spearhead the green hydrogen revolution

Chile’s mining industry is eager to use green hydrogen to facilitate decarbonization.

Examples include an Anglo-American megaproject in Metropolitan and Valparaíso regions, and Antofagasta Minerals' participation in developing a hydrogen powertrain to be used in mining trucks. 

But green hydrogen could also be useful to power heating and drying processes or smelting and refining facilities, among others.

BNamericas talks to Javier Jara, a former deputy director of geological service Sernageomin and currently managing partner at Estribor Consulting Group, about the benefits of green hydrogen and the government's 2023-2030 roadmap to encourage development.

BNamericas: What benefits can green hydrogen create for mining?

Jara: Hydrogen systems provide a clean and constant source of energy, allowing more efficient operation and greater autonomy compared to diesel vehicles. This can translate into higher productivity and profitability for mining companies.

It brings innovation and technological leadership, and it could position Chile’s mining industry as a benchmark in the adoption of clean and sustainable technologies. This will attract more investment and international cooperation, strengthening the country's reputation for green mining.

BNamericas: What should the government’s green hydrogen roadmap include?

Jara: A clear and stable regulatory framework must be established to promote production, use and export. This implies policies and regulations that encourage investment, simplify procedures and provide certainty to those who develop projects.

Academic training should also be strengthened to create technical and professional capacities in areas such as production, storage, distribution and applications. Along with this, promoting public-private cooperation is important, as well as the relationship between academia, industry and research centers to develop technologies.

This way, Chile can make the most of its green hydrogen potential as a sustainable and cost-effective solution to energy and environmental challenges.

BNamericas: How can investment be encouraged?

Jara: With financial incentives, such as subsidies or tax exemptions, and establishing strategic alliances and support programs. The integration of the hydrogen value chain from production to distribution and final applications must be addressed. This implies promoting opportunities in key sectors, such as mobility, industry and power generation, to boost demand and ensure sustainable development.

Export must also be promoted, which implies developing adequate infrastructure and logistics, identifying potential markets and establishing international agreements to facilitate shipments.

BNamericas: A recent McKinsey study found that large mining operations in Chile could work with zero-emission trucks starting in 2030-35, generating 30% of national hydrogen demand. Is this goal feasible?

Jara: The technologies are in early development and not fully commercialized. More investment in research, development and testing is required to improve the efficiency and reliability of this technology.

It is also necessary to develop an adequate infrastructure for production, storage and distribution to supply mining trucks. This implies having charging stations and expanding production capacity.

On the other hand, the profitability of transitioning mining trucks to zero-emission technologies must be demonstrated, generating a return on investment that is attractive for mining companies. This can be achieved by optimizing operating costs, improving efficiency and increasing the useful life of vehicles.

BNamericas: And what needs to be improved on the regulatory and political fronts?

Jara: It is essential to promote investment and hydrogen projects in the mining industry. This implies establishing decarbonization policies, emission regulations and sustainability standards that encourage the adoption of zero-emission technologies.

Permitting processes must also be simplified and expedited so as not to delay projects. To achieve this, a comprehensive approach is required that involves public-private cooperation, R&D investment and incentives.

In addition, the exchange of knowledge between mining companies, technology providers and relevant actors in the field should be encouraged.

BNamericas: Where exactly in the mining sector can green hydrogen technologies be applied?

Jara: Mining uses a variety of vehicles, such as trucks, cargo and hauling equipment, and auxiliary vehicles. Replacing diesel engines with hydrogen powertrains could significantly decarbonize the industry.

Conventional energy sources, such as diesel or natural gas, can be replaced with hydrogen-based generation systems, such as fuel cells. Processes such as mineral drying or facility heating can also benefit from hydrogen as a heat source.

Underground ventilation, which is a critical aspect in mining to ensure the safety and supply of fresh air to workers, could use hydrogen as a clean and efficient alternative to conventional systems that rely on diesel power generation. It can also be used as a fuel in the smelting process and a reducing agent in refining stages.

BNamericas: What obstacles is Anglo-American’s green hydrogen project facing?

Jara: Although it has the potential to take advantage of the region's natural resources and favorable conditions, it will face challenges related to infrastructure, costs and regulation. Overcoming them requires public-private cooperation, as well as a strategic focus on the development of the hydrogen value chain.

BNamericas: What’s the scope of the Hydra project, in which Antofagasta Minerals participates?

Jara: This project relates to the first hydrogen powertrain prototype for mining trucks in northern Chile. It has significant projections in sustainable mobility and decarbonization. By using H2 as an energy source, greenhouse gas emissions from mining trucks will be reduced, helping sustainability objectives, reducing the environmental footprint, achieving energy efficiency and operational autonomy.

BNamericas: What other hydrogen projects are being tested in Chile, and are they aimed at mining?

Jara: There are several interesting projects.

H2 Chile: A public-private initiative involving Enap, Engie, Siemens Energy, Enel, CMPC, AME, Codelco and Colbún that seeks to develop a roadmap for hydrogen use in various sectors, including mining.

Green Hydrogen Node: Led by Universidad de Tarapacá, the project involves evaluating the technical and economic viability of the production and use of hydrogen in that region, which is an important mining area in Chile. The aim is to develop a prototype hydrogen plant to supply the mining industry and other sectors.

GreenH2Chile: Siemens Energy, Electro Power Systems, Engie and Siemens Gamesa are developing a pilot hydrogen production plant in Magallanes region, which will use wind energy and is planned to supply the mining industry in the area.

Kura H2: Led by Enaex, the project involves developing a hydrogen transport system for explosives trucks in mining operations.

AndesH2: This startup from Antofagasta focuses on sustainable mobility and the mining industry with solutions for dual use of diesel and hydrogen in vehicles that allows the partial replacement of fossil fuels.

BNamericas: The Inter-American Development Bank approved a US$400mn loan for Chile’s hydrogen industry. How should the funds be managed?

Jara: Strategic planning is essential to identify the industry’s key areas of investment and development. Funds could be used to build production, storage and distribution infrastructure, including electrolysis plants, charging stations, storage systems and distribution networks.

Another part could go to R&D to boost innovation, improve efficiency and reduce production costs, and to training programs. This, along with strengthening human capital, would encourage job creation. Transparent, efficient management aligned with the country's strategic objectives is essential to make the most of this opportunity.