Green targets are empty without tackling toxic mining

Industry holds the key to transition to net zero, but it must be reshaped to avoid destructive practices

We must dig deeper into the connection between the commitments to a net-zero future arriving daily from governments, company boardrooms and financial institutions and the historic story of Achilles, greatest warrior of the Trojan war killed by his only weakness.

That is because the potential Achilles’ heel of our net-zero future is becoming clearer. It is the dependence of these decarbonisation targets on the mining sector to safely produce the minerals critical to the low-carbon transition.

Many of the targets assume a rapid rollout of low-carbon technologies such as wind turbines, electric vehicle batteries and solar panels. That is well understood, but underpinning these technologies is a dependency on unprecedented quantities of critical “transition” minerals, such as lithium, cobalt, copper and nickel.

However, the challenge is not just a question of whether more can be dug out of the ground, but all the complex social and environmental consequences of doing so.

A leading market analyst that tracks the mining industry and monitors the current and future production from all mine sites recently gave a presentation to me and a group of investors engaged in an extensive dialogue with the European car industry.

Our dialogue with the car industry is about their ability to meet their climate targets and growing demand for electric vehicles. However, we wanted to understand the dependency of those car batteries on the minerals that flow into them – and the scenario that was presented was sobering.

For many of these minerals, such as lithium and graphite, meeting the levels of demand expected in 2030 will require not just a doubling of production but many multiples of that compared with 2020 production rates. Across all critical and even not so critical minerals there is going to be a massive increase in demand.

While mineral supply and demand projections vary and industry will no doubt become more efficient in using minerals, technologies will substitute rare minerals for others, and society will become better at recycling, there is no doubt that we will still face a gaping disconnect between climate ambition and mineral reality.

This is not a future problem: shortages of critical minerals and clean energy components are already pushing up low-carbon technology prices and slowing manufacturing.

So what to do? Building out the necessary supply chains for batteries within the necessary timeframe will require a massive and urgent injection of capital for clean technologies of multiple trillions.

Investors and other financial institutions will have a vital role to play in mobilising capital to ensure the expansion of low-carbon supply chains, but first we must understand where investment is needed to support government and corporate net-zero commitments.

However, as already mentioned, the task is not just about being able to extract more, but also being able to tackle head-on the many environmental and social issues that have repeatedly called into question the mining sector’s social licence to operate.

Mining is a practice that, for millennia, has provided the resources that have brought development, connectivity and prosperity to many throughout the globe. But it is also an industry that can have devastating impacts on communities and the environment when it goes wrong or is badly managed.

Recent disasters have included the destruction of a 46,000-year-old heritage site in Western Australia’s Juukan Gorge that was deeply precious to Aboriginal people; and the horrific tailings dam collapse in Brumadinho, Brazil, in 2019, when millions of cubic metres of mining waste contained in a hillside structure collapsed and killed 270 people and polluted rivers for many miles. These tragedies have prompted investors to seek a different response.

Good practice exists within the mining industry and there is a new generation of leaders coming through that recognise that their company social licence depends on getting their relationships with communities and the environment right. However, if there is to be a massive expansion of mining, as the global climate transition demands, we need a very different approach to ensure it does not see a proliferation of poor mining practices and resulting conflicts and environmental legacies.

It is for this reason that next week the London Stock Exchange is to host its first dedicated mining event: the launch of a Global Investor Commission on Mining 2030.

This initiative will be supported by the Archbishop of Canterbury and the Archbishop of Cape Town, backed by investors and supported by the United Nations. It will lead a dedicated process to establish a new path to reshape the mining industry.

It aims to create a vision and a practical plan that can drive real-world change in mining practice at every site around the world. And it will support those communities, companies and leaders that are striving for mining not to be the Achilles’ heel of the transition and instead an industry that meets the demands of society without harming people and the environment.

This will not be an easy path, but one that if taken will ensure mining’s social license and the achievement of the low-carbon transition.