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17/07/2024
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Mining Sector Urged to Show Ambition in Backing the Net Zero Transition

The responsibility to make sustainable lifestyle choices is down to every individual. This collective spirit renders itself to industries too, as the burden of decarbonization weighs on CEOs, industry leaders and policymakers.

The mining sector, in particular, deserves its new-found spotlight in the context of the global energy transition. Forecasts show that mining companies need to go above and beyond what has been expected of them if the world is to win the race to a net-zero economy.

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Many products of mining are central to the production of clean energy technologies. Cobalt, lithium and copper are used in batteries. Wind turbines, solar panels and geothermal plants are largely made of steel, which relies on the extraction and processing of iron; the list goes on. In order to produce all the EVs and battery storage units needed to meet the Paris Agreement goals, a demand increase of 12.2Mt is predicted for energy transition minerals between 2020 and 2040.

Avoiding a critical minerals deficit

Currently, the vast majority of critical raw materials required for the production of EVs comes from Africa. The continent accounts for almost half of the world’s cobalt and manganese stocks. Last year, 70% of the world’s cobalt was produced in the DRC.

The IEA predicts that as early as 2030, existing mines and those under construction will produce only about half of the cobalt and lithium and around 80% of copper required. The countries, most of them in Africa, will struggle to meet the skyrocketing demand, and where supply depletes, the quality of the materials often suffers too. The average grade of viable copper, for example, is 0.5-2.0% per tonne, down from as high as 4% back in 1900.

Reliance on a few select regions to supply the world with these products carries a natural risk. The quantities of the minerals and metals needed for the energy transition are finite at any given location, with some products being significantly rarer than others.

Moreover, a large number of areas important for mining across countries like Zambia, Mali or Kenya struggle with unreliable water and electricity supply, as well as complex political realities. These factors have a direct impact on the value chain. The security and stability of global supply chains of critical raw materials (CRM) cannot be ensured without a diversified portfolio of producer nations.

Revitalizing the mining industry to hit net zero

The mining industry is presented with a challenge: how to increase the extraction of CRMs to necessary historic volumes while avoiding regional overexploitation. Therein lies an opportunity for the sector to re-think the perimeters of its operations. If the industry commits to venture into the uncharted areas of the world, the so-called ‘high risk jurisdictions’, we will find the materials the world desperately needs.

This is not a quixotic endeavour. Emerging markets are showing incredible potential for mining: Kenya has just discovered deposits of coltan. Indonesia announced a discovery of large lithium reserves late last year. Argentina, a country with untapped geological potential, still awaits concerted exploration efforts.

Technological innovations can help in this endeavour. Eurasian Resources Group has just unveiled NOMAD, a remotely-operated soil sampling robot. It is capable of exploring the complex terrains of Saudi Arabia’s desert for CRMs while taking more than 120 samples per day – a major improvement on the maximum of 30 samples that can be achieved manually. Prioritizing innovations like this is crucial; with the right technology these exploration expeditions will become faster, safer, less-resource intensive and less disruptive to the environment, like in the case of NOMAD.

At present, the mining sector is dangerously underfunded. Not enough capital is being allocated to the procurement and deployment of new technologies. A reluctance to invest in mining may slow the energy transition. Apple’s market cap is almost twice that of the top 50 listed mining companies. Ironic, perhaps, given that the electronics industry is powered by metals and minerals which mining companies extract from the ground.

For mining companies to enter the new era of minerals exploration, and the scaling up of production, they must be equipped with innovative technology and an upskilled workforce — both of which rely on investment. But perhaps more fundamentally, they need better public understanding of the role of the mining industry in the future of sustainability.

With mining projects taking 10-15 years to develop on average, we need to make these industry-wide changes quickly. The future of the world depends on the bravery with which the mining industry decides to move forward.

 

Source: World Economic Forum

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