Electrifying the Mining Industry

Abstract

With increasing pressure on the mining industry to cut emissions from diesel powered operations, the adoption of Battery Electric Vehicle (BEV) is becoming a priority. The underground mining environment does however pose a uniquely challenging adoption context. This study examines the adoption barriers of BEV in underground mining and how equipment suppliers are addressing these through Business Model Innovation (BMI). This study adopts a qualitative case study de sign where data were mainly collected through semi-structured interviews with Volvo Group employees and a large Swedish mining company. The findings show that the barriers to BEV adoption in underground mining are not independent, but compound in ways that constrain what customers can adopt and what suppliers can credibly offer. The productivity imperative of mining operations is an amplifying condition where it intensifies all of the identified barriers. The response from equipment suppliers has been that the primary form of BMI enacted is through servitization in the form of bundled service contracts and as-a-service models. Servitization can however be self-limiting, as the risk premiums required to offer these advanced service arrangements can simultaneously increase the economic barrier they were designed to overcome. The study also finds that closing orga nizational gaps in pricing competence, cross-unit coordination, and sales process adaptation are preconditions for servitization to function as intended. This posi tions value delivery as an often overlooked dimension of BMI in capital-intensive industrial contexts.