Lord Ashbourne, Director, Energy & Resources, Edison Group, discusses the importance of the mining industry and its adoption of cleantech as part of the global clean energy transition.
As both businesses and individuals face increased scrutiny of their environmental credentials in the aftermath of COP26, a global transition to clean energy must be an important priority for all industries. Clean technologies reliant on renewable energy are the key to reaching environmental targets and the rapid adoption of cleantech is paramount.
The mining industry lies at the centre of this transition. Cleantech relies on a constant supply of minerals and metals vital to the manufacture of batteries and electric vehicles as well as wind and solar power generation. The global implementation of these technologies is expected to require an increase of nearly 500% in the supply of cobalt, graphite, lithium, and other minerals by 2050.1 As businesses continue to invest in cleantech, guaranteeing the supply of raw materials will be more important than ever.
The mining industry’s vital contribution
Public perception of the mining industry’s negative environmental impact is not necessarily reflected in emission statistics. In fact, excluding Scope 3 emissions, the sector accounts for a mere 4 – 7% of global greenhouse-gas emissions. Nevertheless, the impact of coal within the industry is visible, with indirect Scope 3 emissions increasing mining’s share of global emissions to 28% of the total.2 However, coal mining is a very specific subset of the mining industry. Moreover, recent pledges at COP26 to phasing down coal on a global scale show that steps are being taken to focus resources on renewable energy.
This global commitment will inevitably require increased mining activity for materials such as copper, lithium and nickel, all materials essential to sustaining the growing adoption of cleantech innovation. The International Energy Agency (IEA) predicts that the supply of such transition metals will need to increase six times to reach zero-carbon goals by 2050.3
Electric vehicles, for example, require significantly larger amounts of copper and cobalt than internal combustion engine vehicles, while offshore wind energy infrastructure requires 13 times the intensity of such metal use than land-based power plants.4 Meanwhile, increased production of battery technology – central to the cleantech transition – is estimated to result in demand for lithium increasing at least 13-fold by 2040.3 Even if technological innovation allows for higher rates of recycling in the future, most of the material supply chain will necessitate increased mining activity.
The industry is changing
As the worldwide reliance on the mining industry becomes more evident, widespread attention on industry practices will increase. As a result, companies within the sector have begun to invest in technologies to make mining more sustainable.
For example, Rio Tinto has begun testing green technologies and announced its intention to invest US$98 million in a new 34 MW solar PV project at its iron ore mines in the Pilbara region of Western Australia. This project is expected to supply 65% of the mine’s average electricity demands and 100% of its needs during peak solar generation times.5 Meanwhile, Anglo American, the world’s largest producer of platinum, aims to reach operational carbon neutrality by 2040, while ensuring that its iron ore and nickel operations in Brazil, as well as its copper mines in Peru and Chile, will be sourcing 100% renewable power from 2023.6 At the same time, the company has begun offloading its coal operations, echoing wider decarbonisation efforts within the sector.
Other mining companies have followed suit, with London-listed gold miner Pan African Resources currently in the process of building a 100 MW photovoltaic solar plant as part of its Elikhulu gold operation in South Africa. Adding to these initiatives, The International Council on Mining recently published an open letter with 28 signatories from the world’s largest mining companies committing to net zero goals by 2050.4 These recent commitments to create a more sustainable mining industry highlight the sector’s awareness of the need to innovate in order to reflect ever-evolving environmental standards.
Investment is needed
While the mining sector has already begun making progress towards a greener mining industry, increased investment will be necessary to sustain the sector’s transformation.
As mineral demand increases in line with growing cleantech adoption, the mining industry will require significant funding in order to finance future investment. Morgan Stanley’s global auto team expects 40% of cars sold by 2030 to be electric. This level of adoption, crucial to scale down combustion engine emissions, necessitates eight times more production of nickel, lithium, and copper than is needed today.7 In the meantime, commodity prices keep rising as supply struggles to keep up with rising demands. In the past year alone, the price of copper has increased from roughly US$7000/t to US$10 000/t. Incentivising consumers to buy electric cars will therefore also require significant investments in mining efficiencies if prices are to be kept at affordable levels.
A series of high-profile investments have recently shone a light on the potential impact of large scale investment in mining. For example, billionaires Bill Gates and Jeff Bezos have been looking at cleaner and more efficient ways of extracting and processing raw materials. They have both backed KoBold Metals, a company which utilises AI in order to target high quality ore deposits that require less intrusive methods of extraction.8
Although the traditional image of the mining sector may not seem a natural match for the high-tech ventures of Silicon Valley, these types of investment could offer a solution to some of the environmental issues facing the industry. The mining industry is essential in achieving a greener future and innovations in industry practices show that the sector itself is at the forefront of green technology. As such, the only way to achieve the cleantech revolution is to highlight the industry’s importance and to ensure sustainable investment in future metal and mineral production.
- EL BAZ, O., ‘The Role of the Mining Industry in the Energy Transition’, infomineo, (22 September 2020), https://infomineo.com/mining-industry-in-energy-transition/
- DELEVINGNE, L., GLAZENER, W., GRÉGOIR, L., AND HENDERSON, K., ‘Climate risk and decarbonization: What every mining CEO needs to know’, McKinsey Sustainability, (28 January 2020), https://www.mckinsey.com/business-functions/sustainability/our-insights/climate-risk-and-decarbonization-what-every-mining-ceo-needs-to-know
- ‘Clean energy demand for critical minerals set to soar as the world pursues net zero goals’, International Energy Agency (IEA), (5 May 2021), https://www.iea.org/news/clean-energy-demand-for-critical-minerals-set-to-soar-as-the-world-pursues-net-zero-goals
- SCHNEIDER ELECTRIC, ‘Why mining companies must prioritize the path to decarbonization’, Corporate Knights, (2 November 2021), https://www.corporateknights.com/sponsored/why-mining-companies-must-prioritize-the-path-to-decarbonization/
- ‘Mining & Renewable Energy – A Greener Way Forward’, Watson Farley & Williams, (23 November 2020), https://www.wfw.com/articles/mining-renewable-energy-a-greener-way-forward/
- JAMASMIE, C., ‘Anglo American to halve indirect emissions by 2040’, Mining Dot Com, (29 October 2021), https://www.mining.com/anglo-american-to-halve-indirect-emissions-by-2040/
- ‘Accelerating the electric vehicle transition’, Financial Times, https://www.ft.com/content/41654a34-d472-4aa2-bdab-d5a685af800e
- ‘Billionaire-backed mining firm to seek electric vehicle metals in Greenland’, Reuters, (10 August 2021) https://www.reuters.com/business/billionaire-backed-mining-firm-seek-electric-vehicle-metals-greenland-2021-08-09/
Read the article online at: https://www.globalminingreview.com/mining/20012022/edison-group-mining-is-vital-for-a-greener-future/
You might also like
Flender has received the Supplier Excellence Recognition Award from Caterpillar.