Own BHP (ASX:BHP) shares? Here’s why the iron ore giant is pushing for battery-powered trains

Here’s BHP’s latest clean energy news.

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Key points

  • BHP has announced its plan to trial battery-electric locomotives in its Western Australian iron ore operations
  • Swapping all the company’s trains to battery-powered counterparts could reduce its Western Australian iron ore operation’s diesel-related emissions by 30%
  • Right now, the BHP share price is $46.63

If you own BHP Group Ltd (ASX: BHP) shares, you might be excited to learn that the company is continuing its push to drop its emissions. In its latest scheme, it’s looking into utilising battery-powered trains.

The iron ore giant – which could soon become the largest company on the ASX – has announced its intent to trial electric locomotives in Western Australia’s Pilbara region.

At the time of writing, the BHP share price is $46.63, 1.04% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.16%.

Let’s take a closer look at the futuristic trials the company plans to undertake.

BHP pushes towards battery-powered haulage trains

Owners of BHP shares, rejoice! The company has boarded the electric train, or at least, it’s planning to.

The iron ore giant has announced it will purchase 4 battery-electric locomotives. They are expected to be delivered in late 2023.

BHP will test the trains’ performance and emissions reduction capabilities in delivering iron ore from its Pilbara mines to the Port Hedland export facility.

To put the mammoth task into perspective, a full BHP iron ore train in Western Australia is typically made up of 4 diesel-electric locomotives pulling around 270 cars weighed down with 38,000 tonnes of iron ore.  

By swapping its 180-locomotive strong iron ore fleet to electric trains, the company could reduce its Western Australian iron ore operations’ diesel-related emissions by around 30% annually.

Two of the locomotives will come from Progress Rail – A Caterpillar Inc (NYSE: CAT) company and BHP’s current provider.

The other two will come from Wabtec ­(NYSE: WAB) – creator of the world’s first 100% battery-electric heavy-haul locomotive.

BHP procurement officer, James Agar commented on the planned trials, saying:

By working with two global leaders in Progress Rail and Wabtec, we can broaden the scope of our trials and be better informed as we prepare for the planned replacement of our diesel-powered iron ore rail fleet. This is a good first step with significant potential.

The trials will also test to see if the trains can pick up energy on downhill slopes. They may be able to store that energy to power empty trains on their way back to mines.

If BHP’s plan sounds familiar, it might be because Rio Tinto Limited (ASX: RIO) announced a similar proposal earlier this month.

BHP share price snapshot

2022 has so far been brilliant for the BHP share price.

The iron ore giant’s stock is up 10% year to date. Though, it’s only 2% higher than it was this time last year.

Should you invest $1,000 in BHP right now?

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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