Saudi Arabia is playing a vital role in the green energy transition. The World Bank projects that the energy transition will require an estimated USD1.7 trillion in global mining investment, to meet the demand for minerals and metals.”
TBY talks Dr Alexander Machkevitch, Chairman of the Board of Directors of Eurasian Resources Group, about mining in Saudi Arabia, protecting the environment, and the company’s CSR strategy.
ERG participated in the inaugural Future Minerals Forum, held in Riyadh on 11-13th January 2023: how would you assess the potential of Saudi Arabia to turn into a leading mining hub and how can ERG support KSA to unlock its resources in the mining field?
Saudi Arabia is playing a vital role in the green energy transition. The World Bank projects that the energy transition will require an estimated USD1.7 trillion in global mining investment, to meet the demand for minerals and metals. The MENA region contains a vast array of those essential minerals. Saudi Arabia has the largest mineral deposits in the Middle East, including deposits of key materials for the energy transition, like copper, aluminium, and iron, as well as gold, silver, and lead. The value of these minerals is estimated to be USD1.3 trillion.
In addition, the Kingdom controls significant deposits of gold, silver, and lead. Now, “Vision 2030”, commits the Kingdom to increased foreign investment, by creating special zones and deregulating the energy market to make it more competitive therefore improving the country’s business environment. When implemented in full, the policy framework of Vision 2030 will provide Saudi Arabia with the competitive strengths required to transform its domestic energy market, whilst developing into a leading mining hub in the Middle East. Furthermore, we welcome the news that the Kingdom is also starting to set more ambitious and effective climate targets – for example, for reducing, avoiding and removing 278 million tonnes of GHG emissions annually by 2030. ERG is one of the world’s largest integrated mining and metals companies with a highly diversified product portfolio, including ferroalloys and iron ore, key battery materials such as cobalt and copper, alumina and aluminium, and steam coal.
The Group employs over 80,000 people in more than 16 countries worldwide, from Central Asia, Africa and Europe, to Brazil, China, and Middle East. Through our highly diversified portfolio we have exposure to a variety of end-industries and markets. In this regard, our significant experience in sustainable mining can help Saudi Arabia become an energy powerhouse for the long term.
How is ERG working alongside the country’s stakeholders and leaders of the sector to discuss synergies and possible joint projects to be launched in the near future?
ERG is proud to have been working in the region for many years, supplying our products to numerous clients in the Middle East and creating strong relationships in the region. We support the Middle East Green Initiative, and the convening of its second edition, under the Chairmanship of His Royal Highness, the Crown Prince, and the Prime Minister. The Group has a long-term development strategy in the Kingdom and are working with the Government to proceed with investment in the country.
For example, ERG recently signed an MoU with Ma’aden, the leading mining company from Saudi Arabia, to explore the EV battery metals in the country. The Group is very excited about the major opportunity of exploring a historically underexplored region, with huge geological potential. The project is indicative of ERG’s belief that, in order to produce the high-grade battery materials needed for the green transition, we must pursue mineral exploration beyond the traditional jurisdictions. To support this effort, our offices in Riyadh and Jeddah will be central to our regional development strategy.
In line with Vision 2030, the Saudi Green Initiative works on increasing Saudi Arabia’s reliance on clean energy, offsetting emissions, and protecting the environment. How is ERG positioned to unlock any country’s natural resources in a responsible way?
Accelerated demand comes with increased ESG risk. We look at scaling-up supply in an ESG compliant manner, whilst encouraging inward investment and giving consumers confidence that the product they purchase contributes to the sustainable development of the global economy. In our home jurisdiction of Kazakhstan, The Group has been awarded numerous accolades for our ESG and sustainability credentials. One of our mining plants in Kazakhstan, Kazchrome, was one of the first six companies to receive International Chromium Development Association’s (ICDA) ‘Responsible Chromium Label’, which recognises that Kazchrome goes above and beyond the standard requirement needed to responsibly source chromium.
Furthermore, several months ago, Ecovadis, the world’s most trusted provider of business sustainability ratings, awarded Kazchrome a Platinum award, representing a score in the top 1% of the global iron and steel industry. ERG’s Kazakhstan Aluminium Smelter—the only producer of high-grade primary aluminium in Kazakhstan—also delivers responsible value chain assurance through ERG’s Responsible Aluminium Framework. ERG is committed to going further. We are investing USD230 million in building a major wind power plant in Aktobe region, Kazakhstan. The wind factory will have a capacity of up to 155MW and is expected to reduce CO2 emissions by around 520,000 tons annually, by powering our Donskoy GOK operation and the surrounding region more widely.
As far as the company CSR strategy is concerned, can you share with our readers some iconic examples and projects that the company is currently carrying out?
ERG has been enacting positive change in the mining sector for a very long-term. The Group co-founded the Global Battery Alliance, which is committed to establishing a long-term sustainable and circular battery value chain. The world’s first Battery Passport proof of concept was unveiled at the recent World Economic Forum in Davos. The Passport is an entirely unique proposition, and through its deployment, we can bring greater transparency, accountability and standards to the global battery value chain. Furthermore, ERG has supported the GBA in launching its Greenhouse Gas Rulebook, Human Rights and Child Labour Indices whose frameworks will serve as key performance indicators for the GBA’s flagship Battery Passport Initiative. Additionally, ERG has co-founded Re|Source, another initiative that can contribute to developing a sustainable mineral roadmap.
The Group has instituted ESG development programs across the world. For example, in the DRC, we are proud supporters of the Good Shepherd Foundation, a programme dedicated to housing, educating, skilling and supporting the local communities that live close to the Metalkol RTR production facility. In Kazakhstan, through our ESG initiatives, we have managed to significantly raise livings standards, reduce air pollution, and directly support the national economy through direct investment. In this regard, The Group is committed to supporting the people of Saudi Arabia and the Middle East through likeminded ESG initiatives. Whilst we are committed to developing a sustainable, circular energy value chain in the Middle East, we also want to improve the lives of people on the ground.