A year after the pandemic struck, Benedikt Sobotka, CEO of Eurasian Resources Group and Co-Chair of the Global Battery Alliance, reflects on the priorities that have guided ERG’s response to the pandemic, key strategies that have allowed the company to maximise its contribution to global economic recovery, and the lessons learnt about the role of the mining sector in shaping the global economic landscape post-pandemic.
Q. What priorities have guided ERG’s response to the pandemic?
Faced with the global pandemic, ERG adapted quickly to the rapidly evolving reality. Our response to the pandemic has been driven by several key priorities, including, first and foremost, protecting the health and safety of all our employees and contractors, their families and wider local communities. We worked tirelessly to increase the competitiveness and flexibility of our business, aiming to create new opportunities for long-term growth and innovation.
We swiftly implemented an extensive business continuity plan, introducing precautionary measures across our sites, while working to safeguard our supply chains from Kazakhstan to Africa and Brazil. These measures included installing remote thermal sensing cameras at our plants and introducing strict disinfectant and social distancing regimes. In Kazakhstan, ERG’s home, we adapted one of our laboratories to produce antibacterial gel and acquired a local medical centre to provide free medical care to employees with COVID-19.
Working closely with our partners at the Good Shepherd International Foundation (GSIF) in the Democratic Republic of the Congo, we have sought to better understand the implications of the COVID-19 pandemic for our local communities in Kolwezi, adapting our approach towards social investment. We have, for example, supported GSIF in providing protective personal equipment for the local communities near Metalkol RTR, delivering this through the Bon Pasteur vocational training programme.
In addition to the wide-ranging preventative measures, our employees showed dedication to the business at a challenging time, quickly adapting to remote working practices whilst keeping teams safe, productive, and engaged. For example, our team at BAMIN, ERG’s subsidiary in Brazil, introduced a series of virtual happy hours to facilitate team bonding and engagement as employees adjusted to the new normal. This is a clear demonstration of the strength of our business and the robust corporate culture we have built at ERG.
In recent years, the group has also embraced business transformation through digital technologies integrated into our group-wide Digital Strategy. The COVID-19 crisis has pushed us even further toward digitalisation, as we have continued our journey to meet the demand for materials of the future, such as cobalt, copper and aluminium, fuelling the transition to a low carbon economy. At several of our sites in Kazakhstan, for example, we have continued the roll-out of our Smart Mine initiative, an automated system for optimising mining operations. The accelerated adoption of new digital technologies at our operations has helped us respond and adapt to the new norms – such as supporting remote collaboration and enforcing safe distancing at our manufacturing sites.
Finally, whist the crisis brought significant challenges to the industry as a whole, it also created unique conditions to accelerate innovative projects that will set the direction of the metals and mining sector’s trajectory for the future. Crucially, we have been able to advance our work in the Global Battery Alliance, a public-private collaboration which aims to create a sustainable battery sector where ERG is a co-chair and whose members include some of the leading businesses and international organisations. Bringing together a range of stakeholders along the battery value chain, the GBA has been developing a ‘battery passport’, a type of quality seal on a global digital lifecycle platform for measuring a battery’s sustainability, material provenance, and socio-environmental impact. I am excited to say that we are very close to launching the passport demonstration model.
Q. What has allowed ERG to maximise its contribution to global economic recovery?
What we are seeing now in the global economy is a rapid uptake in metals like copper and cobalt, used in electronics and electric vehicle batteries. These metals, if sourced responsibly, will be the bedrock of the sustained economic recovery due to their importance in the clean energy revolution, alongside their relevance for other vital industries. It is a bedrock comprised of influential metals like copper, cobalt, and aluminium, which can be used at construction sites, on factory floors or in everyday household appliances. These are the metals the world cannot do without and ERG goes to great lengths to ensure their steady supply around the globe.
One of our metals, copper, is becoming especially sought after as, apart from being used in EV batteries electronics, it possesses antimicrobial properties that make it ideal for surfacing contact areas in hospitals. Aluminium’s light weight, paired with its corrosion resistance and recyclability, makes it a perfect fit for use in electronics and airplanes. Cobalt, another critical metal that ERG produces, is used in most indispensable everyday items, such as phones and laptops.
Incoming stimulus packages for the economic roadmap out of coronavirus-induced slumps have also encouraged investments into clean tech and low carbon energy sources, putting ERG in a position to supply the elements needed for ‘green’ infrastructure operations.
The World Bank predicts that global cobalt, copper, and nickel production could increase 500% by 2050, to match ever growing demand across all sectors.1 According to Deloitte, the rapid uptake of electric cars alone will bring over 30 million EV sales annually by 2030, increasing demand for battery materials by 1100%.2
ERG is exceptionally well positioned to meet this increased demand of necessary materials to help the planet rebuild after the coronavirus pandemic, providing a steady stream of metals supply to rapidly expanding markets. Our Metalkol RTR facility, which is ramping up its phase 2, is now the second-largest standalone cobalt producer globally, alongside being a major copper producer. At other ERG operations in Kazakhstan and Brazil, we have met or exceeded many of our 2020 production targets, despite contending with the global pandemic. ERG continued to expand with the commencement of production at the Pedra de Ferro high quality iron ore mine in Brazil, part of our BAMIN subsidiary’s operations in the country, to meet the planet’s increased appetite for 2020’s best performing major commodity.
Alongside ERG’s mining operations, our involvement with various sustainability initiatives has allowed us to further economic recovery from the coronavirus. Research by the Global Battery Alliance, where ERG is a founding member, suggests the establishment of a sustainable battery supply chain could lead to the creation of 10 million new jobs by 2030, adding £150 billion of economic value to the sector.3
Another initiative ERG is proud to be a part of is Terra Carta, launched by His Royal Highness, The Prince of Wales, earlier this year. We were one of the first 25 organisations to support the project, which provides the framework for a recovery plan that puts nature, people and the planet at the centre of global value creation. The initiative sets out nearly 100 actions for businesses to subscribe to, providing a clear pathway to the realisation of the Paris Climate Agreement and other Sustainable Development Goals by 2030.
Q. What are the lessons learnt about the role of the mining sector in shaping the global economic landscape post-pandemic?
The mining sector has demonstrated its critical role, being on hand to provide the materials required to build back better and stronger. With access to necessary resources, key infrastructure and established deep links to local ecosystems, mining companies can step in where other entities cannot.
For example, as part of ERG’s response, we adapted our operations and supply networks to provide 19 000 reusable face masks to our employees and local communities in Kazakhstan, produced at a new dedicated factory set up by ERG, with a further 10 000 going to local communities in the DRC as part of our strategic partnership with the Good Shepherd International Foundation (GSIF). The group also set aside US$10 million to create a national foundation in our home country of Kazakhstan, to mitigate the socio-economic impacts of the outbreak.
Furthermore, the mining sector can enable countries to convert resources into opportunities for sustainable growth, rooted in the UN Sustainable Development Goals. This has been the focus of our continued partnerships with local governments, civil society groups, and NGOs aimed at boosting socio-economic growth in the countries of our operation. One of our most pressing tasks has been finding new ways to support the surrounding population at our operations in the DRC, a country where around 70% of the country continues to live in extreme poverty, according to the World Bank.4
What the global pandemic made clear, is that the mining sector, public organisations, and communities must work collaboratively to aid recovery efforts. I am proud of ERG being among the first two businesses to contribute to the Fund for the Prevention of Child Labour in Mining Communities – a Global Battery Alliance collaboration, administered and programmed by UNICEF. The fund aims to raise US$21 million over the next three years to address the root causes of child labour in mining communities in the DRC. For over three years ERG has supported the GSIF efforts in the DRC, who have protected around 3000 children from labour in often dangerous conditions, through initiatives such as the Child Protection Centre in Kolwezi launched in September 2019. The centre can accommodate around 1000 children, providing education, nutrition, and other services.
- ‘Mineral Production to Soar as Demand for Clean Energy Increases’, The World Bank, (11 May 2020)
- ‘Worldwide roads on course for 31.1 million electric vehicle milestone by 2030’, Deloitte, (27 July 2020)
- Global Battery Alliance, ‘A Vision for a Sustainable Battery Value Chain in 2030’, World Economic Forum, (September 2019)
- ‘The World Bank in DRC’, The World Bank, (4 May 2020)
Read the article online at: https://www.globalminingreview.com/special-reports/29032021/q-and-a-from-erg-on-the-role-of-mining-in-shaping-the-global-economy-post-pandemic/