The need to decarbonize heavy haul rail in time to meet Australian iron ore miners' net-zero goals is driving previously reluctant collaboration among the world's biggest iron ore exporters.

Fortescue Ltd. aims to reach carbon neutrality by 2030, and Rio Tinto Group, BHP Group Ltd. and Roy Hill Holdings Pty. Ltd. have all set 2050 net-zero targets. Rail emissions will be among the toughest to abate as the miners move away from diesel engines to renewable power options that require long lead times to develop. BHP estimates it will need to build 900 MW of generating capacity from a mix of gas and renewables by 2040 as it eliminates diesel across its Pilbara iron ore mining and rail operations.

The longtime competitors will need to work with each other to get there, according to Richard Cohen, Rio Tinto's managing director for port, rail and core services.

Richard Cohen, Rio Tinto's managing director for port, rail and core services, addresses the Heavy Haul Rail Conference in Perth, Australia, on March 13. Source: S&P Global Commodity Insights.

"What we've got to see is collaboration at an industry level with multiple participants ... particularly in the Pilbara, where players have seen each other as competitors for a long time," Cohen told the Heavy Haul Rail Conference in Perth, Australia, on March 13.

"In the last two years, we've seen more discussion on collaboration and more progress than we've seen before," Cohen said. "It's early days and I think we should start building some momentum, but I don't think we should underestimate the rail industry working hard as a collaboration effort."

Cohen said there is already some information-sharing about decarbonization initiatives. "We've got to realize — and decarbonization is a great example — we're all trying to solve the same problem. We can all put the same effort in and duplicate our work and get there 10 years later, or we can try to complement each other, do it together, share information and move faster," Cohen said.

'Not messing around'

Western Australia's annual rail freight emissions comprise 13% of the state's transport emissions and are expected to drop by 2030, largely in line with the federal government's Safeguard Mechanism industry emissions reform requirements, according to state Transport Minister Meredith Hammat.

However, "the challenge to decarbonize rail freight is greater than [in] other sectors," Hammat told the conference March 14. "Electrification and alternative fuel solutions are progressing, but we know these solutions are still years away. So the industry has a bit of work to do in this space."

Rio Tinto's desire to connect its rail operations to new technology and suppliers was key to talks with Australia's CORE Innovation Hub, which led to the creation of the Pilbara Heavy Haul Rail Collaboration Centre in December 2023, according to CORE co-founder Tamryn Barker. Discussions with miners centered on collaboration on the future of work, with a particular willingness to focus on safety and decarbonization as "key outcomes that people want to get to," Barker told S&P Global Commodity Insights on the conference sidelines March 13.

"There is very, very strong will at the highest level to collaborate. They're not messing around. [Cohen] and his counterparts in the other iron ore majors are driving this," Barker said.

"They want to have a long-term view of building up capability, not just as individual organizations, because they all have skills shortages and there are new skill sets around electrification," Barker said of iron ore producers. "There is what industry calls a 'rail cliff' coming in the foreseeable future with a swathe of rail professionals about to retire."

Technology race

Fortescue, BHP, Roy Hill, rail freight operator Pacific National Pty. Ltd. and the Australasian Railway Association (ARA) are also involved in the collaboration center. In 2021, Rio Tinto's Cohen was appointed to chair ARA's heavy haul executive committee to help the industry navigate "unique challenges in securing specialist skills, driving research and innovation and further automating their networks," ARA Chair Danny Broad said at the time.

Although the miners are in "a technology race, and some of those proprietary applications within their operations are sometimes hard to share because they're competitors, there have been several areas where we've seen their transition to net-zero operations [provide] opportunities for collaboration," Renee Hakendorf, the Rail Collaboration Centre's national lead, said on the conference sidelines.

"For example, fire and safety management people are actually shared across the Pilbara network, who all need to be retrained and upskilled in dealing with decarbonization technologies like lithium batteries," Hakendorf said.

"The multiplier factor [of cost and time] could be huge if not working together on something when the level of conversion requirement [away from diesel use] is quite massive as well, and the timeline is quite tight," Hakendorf added. "Their net-zero commitments are driving an incredible pace of change."