Dealing With Keystone Shutdown Effect: Norilsk Nickel’s Dual Fuel Consumption Strategy

The possibility of 40% replacement of diesel fuel with LNG.

Resource Erectors has been keeping a close eye on the Keystone shutdown effect since the Biden administration terminated the essential domestic fuel supply pipeline project. This executive order can potentially triple the cost of traditional fossil fuels. Afterwards, thousands of newly unemployed American and Canadian workers were advised by the Biden administration that they could find rapid employment “making solar panels”. 

We all look forward to the era when solar, wind, and geothermal power technology is perfected to the point that it can feasibly replace fossil fuel in a clean, green, all-electric infrastructure. But let’s face it, the technology of 2020 simply hasn’t evolved enough yet to make it cost effective or to protect the environment. The case could easily be made that inefficient green tech is actually more harmful to the environment.

We’ve kept an eye on California, as the poster state for how not to make the transition to green technology when their “model” green grid was on the brink of collapse last September 2020. California’s abysmal “rolling brownout” solution that left businesses and residents sweating in the dark during last summer’s heat wave doesn’t seem to be deterring anyone in charge now from pursuing ambitious Paris Agreement benchmarks. 

So even if this premature longshot transition to green power with all its shortcomings somehow comes to pass, and it certainly might, the mining sectors across the board are facing a spike in demand. The worst kept secret of environmental radicalism is that solar panels and other complex, low-power “green machines” require 10 times as much tonnage in earth mined resources to build. 

In today’s era of global political climate bias, if you call it “green” they will build it and governments around the world will support it.  The mining industry needs to be prepared for the inevitable global ramp-up.

From 2 Mining Shifts to 4 With Rising Diesel Costs?

Obviously more round-the-clock mining production means higher fuel costs and higher OPEX, especially when you’re moving from 2 shifts to 4 to take advantage of rising demand and the higher prices for your mineral commodities. We can help you find the top professionals for your doubled workforce at Resource Erectors. 

You’ll need the top, experienced engineers when it’s time to convert your diesel fleets to LNG, by the way, and that time is closer than you might think.

Norilsk Nickel’s LNG Pilot Program: Tough Testing Grounds in Russia 

The Russian mining concern is working on a 2-mode diesel-LNG engine upgrade to ensure that reliable diesel power is there when a mining dump truck with a 496t payload needs it, going uphill on a cold morning at a limestone mining operation in the challenging, sparsely populated rural Verkhnyaya-Tomulakhskaya area in western Siberia. You can’t ask for tougher testing grounds than that. 

That’s where the Norilsk division’s pilot program is underway to use cleaner burning, cost-effective LNG power mode for those empty downhill cruises when the full 2300 HP of each twin 16-cylinder diesel in a Belaz 75710 is not required.  The investment in converting one dump truck under the pilot project is approximately RUB 11 million. That’s a very reasonable $150,000 USD, and of course the price goes down when you overhaul 30-60 trucks at a time.That will be step 2, a major commitment from the Norilsk team. 

 “If the modernization process covers large fleets of quarry trucks, costs of the works will be significantly lower.”

In our recent blog focused on The Green Energy Effect on the Precious Metals Sector we raised a flag that applies to industries across the board:

“Precious metals and rare earth element mining managers will need to stay on their toes to keep  opex in balance when sharply rising fuel prices combine with sharp spikes in production demand in 2021.”- Resource Erectors- 3 Major Factors For a Precious Metals and Mining Surge in 2021

With the cost of traditional diesel fuel and gasoline on the rise, there are times when politically driven green policies can work to a company’s advantage. Sustainability is just good business, whether or not the climate change experts are correct or not. Cleaner air with Liquid Natural Gas, LNG, is a win/win move for any operation relying on diesel power to hit production goals. That’s why Russia’s Norilsk Nickel, (NILSY)  is staying ahead of the curve with R&D underway now that will let them monetize their own impressive reserves of LNG. 

LNG production to convert heavy mining equipment to dual-fuel consumption: Diesel + LNG

Without considering cost at the pump yet, using the new technology will significantly reduce the emissions of:

• Carbon monoxide 
• Carbon  dioxide
• Nitrogen oxides
• Sulfur oxide
• Dioxide
• Carbon soot

As a result of cleaner burning LNG, the total level of gas contamination on site will decrease. OSHA and MSHA will love it, not to mention the local EPA. The second factor of the win/win equation is OPEX savings. And we’re not talking propane powered forklifts here. Any industry operation that relies on the workhorse dump truck or heavy diesel-powered mining equipment can balance the fuel crunch expenses now sure to come in 2021. They’re already here at the time of this writing. 

Replacing diesel fuel with LNG, reduces the cost of fuel for operating heavy mining equipment, knocking down the cost of transporting 1 ton of overburden/ore. NILSY engineers are modifying 4 BelAZ mining dump trucks for their pilot program. The engines of these behemoths will be upgraded to operate in two modes; diesel and LNG. The ambitious LNG replacement target is 40%. This  is just one move in the broader forward-looking Norilsk Nickel strategy to cash in on the reserves of  LNG they’re sitting on at the old Nickel plant site.

 “…the Norilsk division has impressive reserves of natural gas and a developed infrastructure for its production and transportation..” according to the informative article at Global Mining Review.

Let’s hope this sensible innovation can catch some legislative support here in the US. If the new Biden Administration is sincere about making the transition away from fossil fuels, federal and state environmental grants for LNG conversion in American industries across the board should be on the table for the American mining industry and other diesel-reliant sectors now. Without adequate mining and manufacturing support, no green power grid on the planet will ever have an adequate supply of solar panels and wind farms needed to replace the traditional carbon-based energy we all rely on now. 

Or the current administration could give two neighboring, allied, North American countries a reprieve and reopen the Keystone Pipeline while green tech catches up.  

About Resource Erectors

At Resource Erectors we place the top, experienced, professionals you need in mining, civil engineering, construction materials, minerals, tunneling, aggregates, the concrete industries and more. When it’s time to shift gears and expand your workforce we have connections with the best-qualified seasoned engineers, executives, field managers, sales specialists, and any position requiring our decades of industry-specific human resource experience.We work with industry-leading companies in the US, Canada, and Australia.

When you’re ready to build or join your dream team don’t hesitate to call on Resource Erectors so we can all get to work.