Ferrexpo fires up decarbonisation and autonomy DIGITAL REPORT 2022
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WRITTEN BY: DOMINIC ELLIS PRODUCED BY: ASHLEY KIRBY
FERREXPO FIRES UP DECARBONISATION AND AUTONOMY
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Interim CEO Jim North is firmly focused on decarbonisation, renewables expansion and autonomous fleet development
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errexpo Interim CEO Jim North’s “big three” are probably not that dissimilar from many of his counterparts: growth, decarbonisation and technology. But the fact that we spend the best part of an hour discussing them underlines their vital importance to the iron ore pellet company’s overall strategy. North has been with Ferrexpo for seven years and Interim CEO since 2020. He speaks clearly and in an assured manner, which again is indicative of his focus. As Group COO between 2014 and 2020, operational efficiency and discipline were priorities, but now as CEO, the task is how best to execute the growth and decarbonisation strategy for the Swiss-based commodity trading and mining company, listed on the London Stock Exchange, whose operations are in Ukraine; North is actually speaking to me from central Dubai, which seems strangely appropriate too for such an international entity (the Gulf city serves Kiev with two flights a day). So to growth first. In its half-year results for 2021, revenues rose 74% to US$1,353 million, profit after tax came in at $661 million, and pellet production totalled 5.6 million tonnes; the pandemic-defying figures were attributed to a ‘multi-year investment programme in our assets’. North remains humble though. “You never conclude business improvement – there are
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“ Transitioning from a manned operation to autonomous is not just a case of buying the technology, bolting it onto the truck and letting them go. It’s about learning to live with autonomy” JIM NORTH CEO, FERREXPO
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different rates of implementation,” he reflects. Operations and sustainability are now clearly two sides of the same coin. Ferrexpo is aiming for 30% reduction in combined Scope 1 and 2 emissions by 2030 and to be carbon neutral by 2050. After achieving 16% and 6% reductions in 2020 and the first half of 2021 respectively, North is confident it will get there “well before” the scheduled date. “We’re well down the path to achieving 30%,” he said. “We have no intention of using carbon offsets – we want to do real carbon reduction. We like to be conservative and over deliver. As we progress, you need to put more work in to get smaller gains.” There are substantial amounts of renewables in the Ukrainian grid already but that will only take the company part of the
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JIM NORTH TITLE: CEO INDUSTRY: MINING LOCATION: DUBAI Jim joined Ferrexpo in November 2014 and since then he has successfully managed the Company's operations and introduced world class operating practices. Previously, Jim was Chief Operating Officer of London Mining plc, where he was accountable for setting the company's operational and investment strategy around the world. Prior to this, he held a variety of senior operational management roles in multiple commodities with Rio Tinto and BHP.
EXECUTIVE BIO
way in addressing Scope 2, so it is targeting solar and wind as possible solutions. It is already trialling a 5MW solar plant, and so far North is happy with the performance. “We want to run it for a period of time to test the seasonal variations before we do more internal investment in renewables.” It is also developing a small hydrogen test plant, and initially use it to replace natural gas in one of four pelletiser lines. Construction and commissioning will start by the end of next year. Green hydrogen, for Ferrexpo, has two uses: as a gas replacement in the pelletisation process, and possibly to provide an alternative power source for mining auxiliary fleet. “In terms of the overall renewables strategy, there has to be a blend. It isn’t cost effective to use hydrogen for power generation. “We don’t want to take on significant tranches of debt. The commodity price will determine the rate of implementation of our decarbonisation plans.” Electrification and energy efficiency are increasingly key subjects, especially as its fleet of 86 trucks is forecast to grow to 134 units. It has set a deadline for the first diesel engine replacement by 2027, though no manufacturer has been selected yet, and he said the “expectation” is that its primary mining fleet will decarbonise by 2032. Meeting its own emission targets is just one element in the sustainable equation, and there are many uncertainties in the wider steel industry. “We recognise that steel industry will need to significantly reduce carbon inputs to meet their obligations. We’re seeing car manufacturers under pressure to have carbon-free steel by 2030, which will be tough – 2040 to 2045 may be more feasible.” He said the bigger question is
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“ As we expand our business, we need to add lab and analysis capacity, and robotics is well advanced in these areas” JIM NORTH CEO, FERREXPO
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Autonomous trucks
how are steelmakers going to fund the transition from traditional blast furnace technology to processes with reduced carbon inputs? “China has invested a lot in traditional steelmaking processes over the last 20 years – for them to scrap all that, and implement direct reduction processes, would be a significant cost. It's not yet clear how European steelmakers are going to fund decarbonisation – that’s going to be multiple billions of dollars. Ultimately the cost of this transition will be passed onto the end consumer and steel will be more expensive, but it’s clear it’s needed.” Autonomous focus drives digital growth Autonomy is an increasingly core focus within fleet development, and currently six trucks (CAT-793, 220 tons) are self-driving. ferrexpo.com
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“We broke the project and robotics is well RISING TO EMISSIONS into two phases, the first advanced in these areas.” CHALLENGES is six trucks, the second is With pellets firing nine. We’re holding off the at 1,400 degrees, AI is Currently, global steel deployment of the further also being courted to production accounts for 7% nine until we’ve operated measure variability in the six for a significant of global carbon emissions, off-gases to manage representing more than all of period,” he said. process variation. the emissions from the world’s “Transitioning from a “That will be a cars put together manned operation to significant advantage autonomous is not • Ferrexpo’s iron ore pellets for us in future. AI can reduce carbon emissions by 40% just a case of buying manage more variables for every tonne of sinter fines the technology, than a traditional control replaced with pellets bolting it onto the room operator.” • Ferrexpo has invested over truck and letting He doesn’t envisage them go. It’s about US$2.9 billion in its operations in that jobs will go in the Ukraine since its IPO in 2007 learning to live new digital age, more • It invested $17 million with autonomy. that skills will evolve. in environmental projects The computer “A good example in 2020 doesn’t have any of this is we employ judgement – it will 12 surveyors who are only do what you ‘autonomous road tell it to do.” builders’ mapping the routes – that’s a Productivity is very important, role that didn’t exist before autonomy. and using robotics is going to play an We also have more network engineers increasingly key role. Jim says Ferrexpo in our business now to manage the is thinking about implementing communication networks – and if you’d robotics in its future mining labs. said to me 10 years ago we’d have a team “As we expand our business, we of drone pilots today, I wouldn’t have need to add lab and analysis capacity, believed you.”
“ I changed the leadership development programme, which was largely focused on hard skills, and now there’s a greater focus on cultural change” JIM NORTH CEO, FERREXPO
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