Most of us associate mining with environmental problems like air and water pollution, catastrophic events like tailings dam collapses, or the effects of coal mining on global warming.
However, the mining of metals like copper, nickel, and cobalt will become more crucial as we look for urgent solutions to reduce emissions from other essential components of the world economy like aluminium, steel, and cement.
According to World Bank projections, there will be a nearly 500% rise in demand for the metals and minerals required to create the clean energy technologies required to satisfy the targets set forth in the Paris Climate Agreement by 2050.
There will be more hazards to biodiversity and the environment from new mines. For instance, the increased demand for the minerals required for green technology is putting over a third of Africa’s great apes in danger.
Simultaneously, the industry is become increasingly susceptible to the effects of climate change, such as heightened heat waves, droughts, flooding, and competition for water resources. According to a McKinsey report, opens new tab, locations with significant water stress account for 30% to 50% of output for copper, gold, iron ore, and zinc; these percentages are expected to climb.
The firm states that by 2040, 100% of copper output in Chile would be found in extremely high water-stressed and desert locations. By the same token, 40% of Russian iron ore production is expected to experience significant water stress.
Due to water shortages, mines spanning from Brazil to Germany had to temporarily close, resulting in millions of dollars in losses for their operators. Improving the robustness of production assets will require lowering the water intensity of mining activities. Other climatic consequences that the sector will have to deal with include extreme heat and sea level rise. The sector is also under pressure to reduce its own emissions as supply chains’ carbon footprint becomes more and more apparent to companies worldwide.
Although demand for coal, which presently makes up almost half of the world mining industry, is expected to decline as pressure to decarbonise grows. This is true not just for power generation but also for steel and cement manufacturers. Rebalancing their portfolios to replace coal production revenues is a challenge faced by many mining corporations.
In 2023, the Global Investor Commission on Mining 2030 was established with the aim of tackling significant systemic risks that impede the mining industry’s capacity to fulfil the requirements of the shift towards a low-carbon economy. “They must do so responsibly and without harm to communities and the environment – or risk conflict and opposition from host communities that will in turn undermine the global climate transition,” the statement reads, as they increase the production of transition minerals.
The commission is led by Adam Matthews, the chief responsible investment officer of the Church of England Pensions Board and is supported by $13 trillion in assets under management. Artisanal mining, child labour, the impact of automation and the future workforce, the rights of indigenous people and First Nations, impacts on biodiversity, climate change, tailings dams, conflict reconciliation, and corruption are among the commission’s priority topics, according to him.
“Many mines need to be expanded or developed from scratch in areas with a lot of complex dynamics to meet our climate targets,” claims Matthews. “Communities must benefit from the assets required for the transition, and we need to focus on this globally.”
The industry will need to electrify as much of its operations as feasible. This will involve employing LNG, hydrogen, and e-fuels in addition to switching out massive diesel-fueled trucks with alternatives that are driven by batteries or fuel cells. The deployment of autonomous fleets will present further chances to increase efficiency, and machine learning and artificial intelligence will help to streamline processes and spot areas where emissions can be reduced.
