Q&A from ALROSA on the role of diamond mining in climate change mitigation

What are the key challenges and opportunities for the diamond mining sector in relation to climate change mitigation?

As the world’s largest diamond mining company by volume, ALROSA recognises that the 2020s are a crucial decade for climate action – and that we have a responsibility to help mitigate climate change.

Reducing greenhouse gas emissions and devising strategies to achieve carbon neutrality are among the key challenges that diamond miners currently face. As an energy-intensive industry, the mining sector is more incentivised than most sectors to reduce its environmental footprint. In the immediate term, this involves minimising energy consumption wherever possible and making diamond mining operations more efficient, including through introducing new technologies and automating processes. For example, ALROSA’s energy efficiency and energy-saving programmes have seen it regulate lighting systems, optimise the power equipment at its operations and reconstruct power supply systems.

However, a more important, long-term way for the industry to reduce its GHG emissions is by diversifying fuel types and reducing reliance on fossil fuels. Whilst this may be more time and cost-intensive, it is a crucial way of making diamond mining operations permanently more sustainable. In recent years, ALROSA has invested in switching its transport from fossil fuels to less carbon-intensive natural gas and introducing solar power to its remote operations. In doing so, we reduced our CO₂ emissions by 50% between 2014 and 2019. With an in-house Vilyui hydropower plant, 92% of our electricity now comes from renewable sources, giving us a carbon footprint that is 79% lower than the median in the metals and mining industry.

The increased attention around ESG practices and climate change mitigation are sometimes perceived as a threat to the traditional way of doing business. However, embedding sustainability is one of the mining sector’s most significant opportunities for long-term value creation, building stakeholder trust, gaining competitive advantage, and achieving sustainable growth. There is a clear correlation between ESG considerations and value creation. For example, a study by McKinsey found that in over 200 studies on the impact of ESG propositions on equity returns, there was a positive link in 63% of cases. The mining sector should embrace sustainability, as it is not a temporary trend, but a permanent shift in how businesses should operate.

What further action should the diamond mining sector take to offset its global carbon emissions?

To offset its global carbon emissions, the diamond mining sector must work towards innovative solutions that can reduce its carbon footprint. For example, ALROSA recently carried out studies into the ability of kimberlite – in which diamonds are found – to absorb CO₂ from the atmosphere. The preliminary studies, which have been undertaken with leading Russian research centres, have shown that kimberlite’s CO₂ absorption capacity could be almost four times greater than ALROSA’s average annual CO₂ emissions, at up to 80 kg/t of processed raw material. Kimberlite ore’s ability to absorb carbon could create an opportunity for diamond miners to advance climate initiatives involving CO₂ capture and storage.

Industry partnerships and cross-sector collaboration are also important for the diamond mining sector to reduce its carbon footprint. As a recent article in the World Economic Forum put it, “When partnerships happen on a global scale, progress ripples outward, with greater impact for everyone.” Over the past 20 years, the industry has taken positive, impactful steps to improve its sustainability performance through initiatives such as the creation of the World Diamond Council, the Responsible Jewellery Council, and support of the intergovernmental Kimberley Process Certification Scheme. Diamond miners must continue embracing transparency and collaborative action to offset global carbon emissions.

By way of example, ALROSA works along with over 100 leading companies from various segments and countries, as part of the World Economic Forum’s Stakeholder Capitalism Metrics initiative. The initiative seeks to improve how companies can measure and demonstrate their commitment to ESG activities and track their contribution to sustainable development. It encourages companies to adopt a formal commitment to creating value for all stakeholders; creating diversity and inclusion for all employees; reporting on commitments to greenhouse gas emissions, climate change, and freshwater sustainability; and implementing new ESG reporting standards. Last year, ALROSA also joined the Carbon Disclosure Project (CDP), an international non-profit organisation helping businesses disclose their own environmental impact. Providing the agency with data on climate change is something all diamond mining companies can do to manage the risks of their operations and assess opportunities for change.

What is ALROSA doing to make its operations more sustainable?

ALROSA is committed to integrating environmental responsibility into all our business practices and strategies. In 2021, we launched a five-year Sustainability Programme, which sets out our approach to sustainability, key performance indicators and our 2025 targets. For example, we have a target that our greenhouse gas emissions intensity will not exceed 0.03 tpy of CO₂ per carat by 2025. We are also aiming to achieve a 50% increase in recycled and neutralised industrial and municipal waste intensity compared to our 2019 level. We have developed a three-year action plan to ensure we have listed all the practical measures needed to achieve the ambitions in our Sustainability Programme. Earlier this year, we also became a signatory of the UN Global Compact, underlining our commitment to achieving the UN SDGs by 2030.

Reducing our impact on the environment, responsibly using mineral resources and investing in environmental protection projects is a key priority for ALROSA. Since 2014, we have spent around US$573 million on environmental projects ranging from land recovery to water protection and biodiversity initiatives. ALROSA funds various wildlife preservation programmes, including populating rivers and lakes with fish, reindeer migration monitoring, creating the ALROSA-Rangifer Chekanovsky natural reserve for wild reindeer and supporting 32 000 ha. Living Diamonds of Yakutia Natural Park. In 2021, ALROSA became the official partner of Pleistocene Park, a large scale environmental project aimed at creating a highly productive ecosystem, similar to the mammoth steppe ecosystem of the Late Pleistocene era. Dubbed the ‘Serengeti of the North’, the project is designed to, through experiment, confirm the theory that pastureland with diverse wildlife in the Arctic prevents the thawing of permafrost and, as a result, slows down global warming.

Responsible sourcing is another important way we ensure we are a sustainable business. ALROSA is one of the creators of the new World Diamond Council System of Warranties (SoW) that was fully launched on 21 September 2021. The SoW requires all diamond industry players to complete a self-assessment to use a diamond warranty statement on their invoices. Last year, we incorporated OECD Due Diligence Guidance for Responsible Supply Chains into our corporate practices. Moreover, to support regulatory initiatives in 2021, we introduced a ground-breaking diamond-tracing technology. This nano-marking technology uses non-invasive laser marking to uniquely identify diamonds and link them to in-depth information about all stages of their life. The nano-mark, which is imprinted inside the crystal lattice, does not affect the quality of the diamond, as confirmed by GIA certification, but it can guarantee it has been responsibly sourced.

Read the article online at: https://www.globalminingreview.com/mining/27102021/qanda-from-alrosa-on-the-role-of-diamond-mining-in-climate-change-mitigation/