Green mining takes centre stage at Cape Town Indaba
GREEN mining is the industry’s new frontier, and there are significant financial pressures driving the change apart from climate change, mining industry speakers and conference delegates said at the Mining Indaba in Cape Town. “Developments in the renewable energy sector will run parallel to and intersect with technological and social developments in mining.
“It is imperative that the industry plays a critical role in the transition to cleaner energy and serves as one of its major driving forces,” said Mazars audit partner and National Head: Mining, Thinus de Vries.
Mark Dickson, the global head of Energy and Decarbonisation at the mining safety, operations and energy transition consultancy firm DSS+, said in an interview that the key take-out for him from the conference was the need for mining companies to form partnerships and collaborations in their transition to net zero carbon emissions. He said the main reason for this was that the energy transition required an entirely new and evolving skills set for mining companies, and it required capital investment.
He said mining companies should consider partnering with companies skilled in designing and implementing a roadmap to net zero, and they could partner with other nearby mines, industries or communities, near their operations, on the transition.
Dickson said there were three main pressures driving the energy transition at present.
Firstly, financial and investment institutions were attaching environmental sustainability criteria to their lending; shareholders, including pension funds, were putting pressure on the companies they invested in to be more environmentally sustainable; while the deregulation of electricity markets, such as in Europe, was creating risk associated with the use of government power supplies.
US Under-Secretary for Economic Growth, Energy and Environment, Jose Fernandez, at the conference, said the global energy transition would require a range of critical minerals and metals in rapidly increasing quantities. For example, an electric vehicle requires six times the mineral inputs of a combustion engine car. Minerals like cobalt, lithium, nickel and rare earths are essential to make wind turbines, photovoltaic solar plants and are needed in battery storage.
Fernandez said the pandemic had shown that the concentration of supply
chains, whether for medical equipment, critical minerals or otherwise, created significant vulnerabilities that required international and domestic approaches.
For example, last year, US President Joe Biden had acted to strengthen the resilience of US supply chains, including the critical minerals sector, and on March 31 he had authorised the Defence Production Act to secure US production of critical materials to bolster its clean energy economy, said Fernandez.
Mining Industry Association of Southern Africa (Miasa) president Sokwani Chilembo said the association’s members were concerned about a “hard stop” or a too rapid energy transition, as this could potentially have severe unintended consequences for communities, investment and environments across the region, such as, for example, rapid deforestation in the potential absence of sufficient household energy.
“We need to have a very carefully considered and pragmatic approach to a just energy transition,” he said. Miasa’s membership comprises 10 Chambers of Mines in 10 countries in the region.
He said the region could not afford to lose out on the investment potential in the exploitation of the additional minerals required for the global energy transition. Another concern among Miasa members were illfounded claims about illicit financial flows, allegedly perpetrated by formal mining companies in Southern Africa, which had the potential to disrupt mining investment and result in disproportionate policy responses from governments.
These allegations, such as made by the UN Conference on Trade and Development (Unctad) – in April 2021, for instance, an Unctad report claimed $88.6 billion (R1.43 trillion) left Africa annually as illicit capital flight – “blame the corporate mining industry for the bulk of illicit flows,” said Chilembo. For these statistics, “they rely on open source trade data, where they haven’t dug deep enough, and they repeat sensationally hard, unsubstantiated numbers.
“These numbers tend to get repeated and eventually harden perception towards the industry,” he said.
He said while there was likely to be some “rotten apples” involved in illicit financial flows, allowing the sector
to develop in a stable regulatory and policy framework instead resulted in increased investment and development in the host country. A far bigger problem across the entire region was illegal mining, he said.
Fernandez said the US Department of State was ramping up foreign policy efforts with like-minded partners around the world to secure cleanenergy supply chains, from mining to processing, to recycling.
This included working with governments through diplomatic engagement and technical assistance and engaging with the private sector and multilateral organisations.
“We share best practices under our Energy Resource Governance Initiative, or Ergi, through technical cooperation with key partners.
“This initiative, founded by the US, Canada, Australia, Peru and Botswana, seeks to build reliable, responsible supply chains for clean energy minerals and metals.
“In addition, the implementation of best practices minimises the environmental and social impacts of mining – precisely the sort of race to the top we are encouraging when it comes to standards,” he said.