Increasing Significance of Sustainable Sourcing and Responsible Mining

In addition to being crucial for the development of clean energy transitions, the expansion of the mineral supply also holds enormous promise for helping some of the world's poorest people escape poverty. Mineral wealth has the potential to generate public money and support the livelihoods of millions if it is used appropriately. However, improper management of mineral development can have a wide range of detrimental effects, such as significant energy-intensive mining and processing activities that produce greenhouse gas emissions (GHG), impacts on the environment, such as biodiversity loss and societal unrest brought on by changes in land use, water pollution and depletion, waste-related contamination, and air pollution, corruption, the waste of public funds, worker and public fatalities and injuries, violations of human rights, such as child labour, and disparate effects on women and girls are all social effects.

Additionally, these concerns could result in a disruption of the supply, which would hinder the shift to renewable energy. Therefore, it is crucial that both businesses and governments manage the negative effects that mining has on the environment and society.

Failure to manage environmental impacts will slow clean energy transitions

To decrease risk and keep their social licence to operate, businesses have a strong commercial justification for addressing these damages. Customers and investors are pressing businesses to address these concerns seriously. Failure to meet these social obligations could damage reputation as well as make it more difficult to raise money or even put you in legal issues.

Over time, businesses have increased their use of ethical procedures. Improvements have been made throughout the mineral supply chains as a result of corporate responsibility policies and procedures being adopted at the corporate level and through industry-wide initiatives. Stakeholders in the profession, however, exhibit a wide range of performances; certain parts display less effort, and more development is required overall. Where legal safeguards are insufficient and structural problems like informal labour, poor fiscal capacity, and large inequities are ongoing, as in artisanal and small-scale mining (ASM), challenges are more significant.

Governments are crucial in encouraging advancements in social and environmental performance. International cooperation to implement appropriate standards will be essential to ensuring that mineral extraction and trade are carried out sustainably and responsibly and that the supply of energy transition minerals is unbroken as supply chains become more global.

Emissions do not negate the climate advantages of clean energy technologies

The development of energy transition minerals could result in a large increase in greenhouse gas emissions. These minerals frequently require a lot more energy to produce each unit of product than other commodities, which raises the intensity of emissions. However, this contribution to emissions does not negate the climatic advantages of clean energy technology when compared to the total life-cycle emissions of other technologies. EVs typically have total lifecycle greenhouse gas emissions that are half that of cars with internal combustion engines, with the opportunity to reduce greenhouse gas emissions by an additional 25% with low-carbon electricity.

Due to their low production volumes, emissions from the production of energy transition minerals are now quite low. However, these emissions will increase in tandem with the anticipated rise in demand. Future production is likely to tend towards more energy-intensive methods, pushing emissions upward, which will make the situation worse. For instance, the production of lithium has shifted from brine-based recovery to concentrate production from hardrock, which has a three times greater emissions intensity than brine-based recovery. Since lithium hydroxide with higher emissions profiles is better suited for batteries with higher nickel cathode chemistries, demand is likewise shifting away from lithium carbonate.

Stronger action will be required to counter upward pressure on emissions

Experience has proven that there are ways to reduce emissions since operational procedures, energy sources, and production pathways can significantly alter the emissions intensity of production among businesses and areas. The emissions footprint may be greatly reduced in the near future by investing in energy efficiency, low-carbon power, and fuel switching. When it comes to decreasing emissions from processes like refining and smelting, which consume a lot of electricity, low-carbon electricity might be especially important. In the medium run, many businesses may find it beneficial to reduce or replace the usage of diesel in trucks. An example copper project was simulated from the mine site to refinement and smelting, and the results show that electrification and renewable electricity have the potential to cut emissions intensity by over 80% when used together.

Over two-thirds of the top 20 mining businesses have set emissions reduction targets for 2030, and large mining corporations have increasingly announced emission reduction goals in recent years. Furthermore, market-driven initiatives have forced businesses to provide voluntary environmental impact disclosures, aiding in the convergence of investor and consumer expectations. While these actions are positive, more pressure from the public sector, financial institutions, and end users is required to broaden emissions reduction programmes beyond the small number of businesses who have made voluntary pledges.

Supply chain due diligence is a crucial tool to detect, assess, and manage risks while enhancing traceability and transparency across all environmental and social aspects. Setting authoritative criteria for ethical and sustainable mineral procurement has benefited greatly from the creation of international frameworks for due diligence, assisted by institutions like the Organisation for Economic Co-operation and Development (OECD). Many businesses currently have due diligence procedures in place, but more coordination is required to guarantee uniformity and boost adoption.