The main conclusions and outcomes of the 2015 Paris Agreement, a historic turning point in addressing Climate Change, helped drive ME Elecmetal's Sustainability Strategy. Thus, the urgent goal of limiting the global temperature rise to "well below 2 °C," along with specific commitments in all countries where we have industrial presence, especially Chile—which has committed to achieving a zero-emission energy matrix by 2050 (Source: Climate Change Strategy, MMA)—motivates the company to gradually and consistently transform its matrix.
This aims to reduce the carbon footprint and advance towards carbon neutrality. Our clients, in this context, have shifted from a focus based on measurement, monitoring, and reduction of Scope 1 and 2 emissions to include Scope 3, which relates to measuring the carbon footprint in their suppliers, and together achieving reduction.
With these trends in sight, ME Elecmetal globally and locally has committed to taking actions to reduce its emissions, where renewable energies play a fundamental role.
To efficiently manage Scope 3 indicators and thus meet climate change targets, our clients demand decisive action and periodic reporting through tenders and contracts, as well as evaluations. Major mining companies we serve are integrating our progress and thereby strengthening their own.
The commitment regarding emissions is contained in ME Elecmetal's Sustainability Strategy, developed since 2022, which consists of 4 Pillars:
- ME Elecmetal Brand
- Our People
- Environment
- Value Creation Connections (suppliers and partners, clients and communities)
In the case of the Environment pillar, the strategy provides guidelines around carbon management, circularity, and efficient management of operational resources such as energy and water. We illustrate the Strategy as follows:
Through the various initiatives developed and to be developed for renewable energy generation: solar and/or wind, it is expected to add another input for greater efficiency in the use of renewable electrical energy and reduction of carbon emissions, decreasing the transfer of carbon equivalent tons per ton of product to third parties.
“According to our statistics, more than 99% of the solar energy generated is used by ourselves. For example, in 2022 and 2023, we generated around 550,000 KWH of solar energy per year, and only 1,500 kWh was returned to the grid.”
The different operations have established renewable energy generation projects for energy efficiency and emission reduction, specified below by region:
Chile, ME South America
In the case of the Foundry Workshops in Rancagua, currently 50% of the electrical energy is renewable, which is approximately 25% of the total energy consumed, in a mixed matrix of electricity plus natural gas. To advance this, the first step was purchasing renewable attributes, with a certificate backing 50% of electrical consumption and an investment of around 25 thousand dollars annually.
At the same time, progress is being made on the installation of a solar plant covering the foundry parking lots, which would generate 1.7 GWH of additional annual energy, equivalent to 5% of the energy used. The construction of these panels responds to an evaluation that showed this alternative was the most convenient in terms of implementation since it does not affect plant processes.
Along with this project, the plant has just been certified with ISO 50.001, energy management, and with this, apart from the certification itself, a 5% reduction in energy consumption compared to the previous year is expected by 2024.
ME China
ME Elecmetal, through its Foundry in Changzhou (2014), has a photovoltaic plant on the roofs of a significant part of its facilities. This has allowed the operation to generate 550,000 KWH per year, of which 99% is consumed by the plant itself, specifically in offices, molding, and grinding, although excluding the foundry process which is highly energy-demanding.
The decision to install these panels is based on two reasons. First, China encourages manufacturing companies to install green energy generation systems and to feed excess energy back into the grid, obtaining preferential prices for the remaining electricity. The second reason is to reduce carbon emissions in lining production, which aligns with the company’s values and “echoes the growing demand from our mining industry clients.”
Additionally, in recent years China has increased green energy generation, leading to a gradual reduction of carbon emissions per ton of product year after year, through matrix diversification.
Although ME China generates only 1.5% of its total energy consumption, by 2026 it expects to expand its plant through a new project of more than 1,000 m2. In parallel, in the case of the 50-50 Joint Venture with Long Teng Special Steel, our partner has built a solar plant at the Shanghai port facility, resulting in green credits from the energy generated there, which partly supports emission reductions in grinding ball manufacturing.
United States, ME North America
For operations in North America, both at the Tempe, Arizona plant and Duluth, Minnesota, solar energy operation options are being evaluated. In Tempe, considering the city has more than 300 sunny days per year, the most progress has been made in this regard in partnership with Kinect Energy, with results expected in the third quarter of this year.
In Duluth, a plant is projected for implementation by 2025. The foundry currently receives energy from Minnesota Power, operated by Allete Inc., a distributor that has heavily invested in renewable energies, including solar and wind generation. In fact, of its total distribution, 50% is wind and hydro energy, while 33% is fossil-based, so Duluth is supplied by an electricity mix (50% renewable provided by Minnesota Power) at 39% and natural gas at 61%.
Finally, as Grupo Elecmetal, and through the subsidiary Cristalerías Chile, we participate in the Las Peñas Wind Farm in the Bío Bío region. Four wind turbines deliver 8.4 MWH injected directly into Chile’s National Electric System (SEN).
An example of the results in the effort to move towards renewable energies is the 50% reduction in the carbon footprint of the SAG grinding ball product, produced by our Joint Venture in China, ME Long Teng. To achieve this reduction, different variables are integrated, such as the implementation of electric arc furnace technology, as well as the integration of renewable energies in its production process.
