Stuck on Capex: Is Mining Electrification Going Nowhere?

The transition to the use of electric vehicles (EVs) for mining operations is still hindered by several factors, such as regulations and capital expenditure (capex). Vice Chairman of the Indonesian Mining Services Association I, Ahmad Kharis, stated that besides performance aspects, there are many benefits to using EVs, such as reduced mechanical maintenance and fuel savings. “With reduced mechanical maintenance and principal support, the EV transition can be carried out,” said Ahmad Kharis at the EV Transition in Mining Industry Outlook 2026 event on Wednesday (29/4/2026). Unfortunately, the main obstacle is the initial capital expenditure, which can increase 2-3 times. This issue makes many miners hesitant in transitioning to EVs. “The efficiency is indeed extraordinary, but if the capex is already high upfront, we are also afraid,” he said. Currently, some mining companies have implemented hybrid heavy equipment transitions, with operational costs recorded to have dropped by 30%. Thus, the option to fully switch to EVs is quite promising, provided the infrastructure supports it. “If the infrastructure is available to support electric vehicles, then EVs are the right choice,” he said. In agreement, Executive Director of the Indonesian Coal Mining Association, Gita Mahyarani, stated that in the coal sector, the transition to EVs as mining operational tools is also constrained by capex. This is because companies must spend substantial initial capital on EV heavy equipment. Nevertheless, she acknowledged that EV use is quite promising and can be applied from upstream to downstream, reducing emissions. So far, EV use in coal mines has mostly been for dump trucks. “In our view, the high capex is a challenge in the coal industry; EVs are promising from an ESG perspective and there is emission reduction,” said Gita. Supervisory Board of the Indonesian Nickel Miners Association, Djoko Widajatno, said the obstacle for miners in transitioning to EVs has been the initial capital expenditure, as the price is 2-3 times higher than fossil fuel-based equipment. “From the miners’ perspective, transitioning to electric vehicles is somewhat difficult due to the high capex; changing it would require 2-3 times the price of the equipment we currently have,” he said.