Australia’s mining sector burning through more diesel
Australia’s mining industry is using a quarter more diesel than four years ago to achieve the same output despite fuel shortages crippling the country.
All major coal mining companies in Australia are currently using more fuel than in 2021/22, according to modeling by the Institute for Energy Economics and Financial Analysis.
However, while diesel prices have skyrocketed due to the closure of the Strait of Hormuz, fuel intensity rates have remained stable due to the Australian mining industry not yet having the ability to turn to alternatives.
Workers also have to dig deeper than in previous years in open-pit mines to reach coal deposits.
More fuel is burned because large amounts of dirt and rocks must be removed.
“The main solutions are often electrification or alternative fuels such as biofuels or hydrogen-based fuels, but the most promising solutions vary depending on the sector addressed and its maturity,” the institute’s Australian CEO, Amandine Denis-Ryan, said during an online panel.
“One of the challenges is access to large amounts of new electricity, often in remote areas.”
Despite this, Australia has the lowest stockpile of the 32 International Energy Agency members and about half the recommended volume.
“It really makes sense in an institution like this where there’s a huge oil shock in terms of supply, given the closure of the Strait of Hormuz,” said Kevin Morrison, the institute’s energy finance analyst.
“So we’ve seen Australian politicians engage in energy diplomacy to get more supplies.”
The government’s 26 cents per liter fuel consumption tax cut will expire at the end of June.
Ms Denis-Ryan said consumers were likely to feel the pinch of rising diesel prices on bowsers.
While Australia’s demand for diesel has increased rapidly over the last decade, demand for gasoline has remained fairly stable.
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