With COP26 now behind us and numerous landmark climate commitments made, the environmental impact of our businesses and industries has never been more important. With one in three of the largest public companies in G20 countries now having a net zero target, it is clear that businesses are increasingly committed to the cause.
The mining industry too has been making important strides towards becoming green. As demand for metals and minerals continues to rise, this will be particularly crucial given the instrumental role that mining has to play in the world’s energy transition.
The implementation of cleantech will require a growing supply of metals and minerals, with an increase in the production of graphite, lithium, cobalt and other minerals of nearly 500% required by 2050 if demand is to be met. The cleantech and mining industries are irrevocably linked and, as such, mining will be at the heart of the world’s race towards clean energy.
The central role of mining
Mining’s image as a high emissions industry is not entirely fair. Excluding indirect Scope 3 emissions, it accounts for only 4-7% of global greenhouse gas emissions and 2-11% of global energy consumption. Coal plays a key role in adding to mining’s environmental impact, with indirect Scope 3 emissions accounting for around 28% of global emissions.
However, coal is a very specific subset of the industry and, in general, the world has begun to phase out its use. For example, over the past six years, the number of coal plant development plans has reduced by 76%. In addition, COP26 saw countries commit to a global ‘phasing down’ of coal. This landmark agreement is the first time that the reduction of coal has even been mentioned in such a climate deal, further demonstrating the shifting attitudes towards its use as a source of electricity generation.
Ultimately, while addressing the environmental impact of the mining industry is important, the sector still has a central role in the adoption of cleantech. Cleantech relies heavily on the minerals and metals that mining produces.
For example, a typical electrical vehicle requires six times more clean metals than those in a conventional internal combustion engine. Equally, an offshore wind farm has 13 times the intensity of use of mined metals than the equivalent gas-fired power station.
According to research published during COP26, temperatures are still set to rise by 2.4°C by the end of this century, far exceeding the desired 1.5°C limit, which makes the race to net zero all the more urgent. Cleantech’s reliance on the mining industry therefore means that the latter will have a central role in the pursuit of clean energy.
Yet several major players have already began working towards a greener future with significant investment in various climate initiatives. For example, the world’s biggest gold miner, Newmont, has recently committed to investing US$500 million in climate initiatives as it aims for a 30% reduction in greenhouse gas emissions by 2030 and net zero by 2050. As recently as this month, this involved it announcing a strategic alliance with Caterpillar to deliver a fully connected, automated, zero carbon emitting, end-to-end mining system to create a safer, more productive mine.
Rio Tinto has also set ambitious emissions targets to reduce its steelmaking carbon intensity by a further 30% and its absolute emissions by a further 15% by 2030. Meanwhile, Canada’s Teck Resources has also committed to being carbon neutral across all its operations by 2050 whilst transitioning to the use of seawater or low-quality water for operations in water-scarce regions by 2040.
Mining companies all over the world are making similar investments. London-listed gold miner Pan African Resources, for example, is currently building a 10MW photovoltaic solar plant in South Africa. Further to these various individual initiatives, the 28-member International Council on Mining and Metals has also committed to a goal of net zero scope 1 and 2 greenhouse gas emissions by 2050 or sooner.
These climate change initiatives, along with the industry’s instrumental role in the development of cleantech, could see the mining industry moving towards the forefront of green innovation.
Investing in innovation
Inevitably, in order for the mining industry to lead the way in green innovation, there must be investment. With demand for renewable technology and electric vehicles expected to double over the next five years, a constant supply of copper is required to enable the world’s adoption of cleantech.
As the transition to clean energy accelerates, the demand for copper is expected to grow by 350% by 2050 with its price already having doubled between March 2020 and now. Within this context, it is imperative that the mining industry invests in increasing mining capabilities to ensure the supply of these vital resources as well as the green transition of the wider economy.
Recently, a series of high-profile investments from some of the biggest names in technology have hinted at one direction that the industry might take to deliver this outcome. For example, both Jeff Bezos and Bill Gates have backed KoBold Metals, a company searching for critical materials needed for electrical vehicles through the use of AI which explores for the metals in a more environmentally friendly manner and with less intrusive methods of extraction.
While the usual ventures of Silicon Valley may seem an unlikely match for the mining industry, these collaborations could be the answer to providing the industry with at least some of the solutions that it needs as well as the recognition that it deserves, given its fundamental role in the transition to clean energy.
The importance of the mining industry in the world’s pursuit of net zero is clear. Mining is entirely entwined with the adoption of cleantech and the race to energy transition. Whilst many mining companies are already making strides towards becoming green, this cannot be done with words alone. Investment in the innovation that is needed to meet both the demand and the environmental standards of tomorrow will be key.