Three Challenges for Decarbonizing Mining
Along with other extractive industries, mining faces increasing demands for decarbonization. Mines are hard on the environment, using large quantities of land, water, energy, and chemicals. Alone, they directly account for 4 to 7 per cent of global greenhouse-gas (GHG) emissions. Now companies are starting to factor in the emissions produced over their products’ lifespans. These downstream activities, such as steelmaking or coal-powered electricity generation, increase mining’s emissions to 28 per cent of the global total.
Mining has a key role to play in limiting the rise in global temperature to below 2°C (and better to be below 1.5°C) by 2050, as per the 2015 Paris Climate Change Agreement. To meet the overall goal, according to the UN’s Intergovernmental Panel on Climate Change, all sectors will need to reduce their emissions 50 per cent from 2010 levels (85 per cent, to reach 1.5°). As it stands, companies’ published targets range from 0 to 30 per cent by 2030, reports McKinsey. That won’t be enough.
Miners are slowly recognizing climate change’s threat to their businesses. “Decarbonization and the green agenda” ranked 4th in EY’s 2021 survey of mining executives’ perceived risks. Few companies have released plans that come close to meeting the Paris Agreement targets and EY says, “Few miners comprehend the true environmental impact of their entire value chain.” However, miners do expect scrutiny from investors on ESG issues such as water management, decarbonization, and green production.
The mining industry’s decarbonization challenges are three-fold. First, they have to make their own operations more sustainable. Second, they have a role to play in reducing their downstream emissions. Third, demand for specific minerals used in clean energy and green technology is set to skyrocket.
Cleaning up mines
Different types of mineral extraction and processing operations have different potentials for decarbonization. As high-grade deposits have been depleted in the past centuries, miners have moved further afield to work lower-grade deposits. As a result, more energy is needed to process more material and to haul it greater distances.
Gold is easily the most CO2-intensive mineral. As it is so high in value, it can be mined in very low ore grades, which generates relatively high volumes of material and waste. The extraction process involves highly toxic metals, such as arsenic. Lots of water is also needed for processing, dust suppression, and tailings ponds. To mitigate gold’s impact, the industry can better integrate renewable energy, bioleaching, and water management into its processes.
Copper, a base metal, is relatively abundant and is used in many manufacturing industries due to its relative low cost and high conductivity. Energy use is the main factor in copper’s CO2 emissions, either from using diesel-burning haulage equipment to transport ore and waste rock or electricity use in mining and mineral processing. Electrifying equipment or using specialized alternative technologies, like a conveyor belt instead of a huge truck, as well as relying on renewable energy will help copper mines decarbonize.
Iron is the most used metal globally and, combined with steelmaking, produces five percent of global emissions. Given its abundance and low-price per tonne, iron mines are shallow and wide, collecting huge volumes of material to be commercially viable. Electrification, renewable energy, and water management can all help reduce emissions produced by the mine itself, but recycling more steel, rather than processing iron ore, makes the deepest impact.
Cement and aggregate are ubiquitous and widely available. Due to high logistics costs it is usually produced domestically. Cement production accounts for approximately 6 percent of global GHG. Some experts believe the only way to reduce cement emissions is to develop an entirely new, low-carbon type of cement.
The problem of downstream emissions
The key for the industry is that the majority of its emissions are indirect. Rio Tinto, the world’s second-largest mining and metals company, reports that the processing of its sold products (mostly iron ore) is responsible for 97 per cent of its total emissions. Across the industry, McKinsey finds that those kinds of downstream, or “Scope 3” emissions, comprise 75 per cent of total emissions.
Coal is the worst overall emitter, due to its fugitive methane emissions and downstream power production (see chart). Fugitive methane emissions — which are more than 30 times more powerful than carbon dioxide at trapping heat in the atmosphere — escaping its mines account for 9 per cent of the world’s total methane emissions. In the mining industry, they account for 89 per cent of total direct emissions.
Future heavy demand for specific minerals
A low-carbon future that tries to counteract or eliminate coal-powered electricity through renewable energy is extremely mineral-intensive. Copper, used for wiring and electricity, will be central to the transition to solar and wind power. Demand for it will also increase as more electric vehicles come online, because they use approximately 3-4 times as much copper as traditional vehicles.
Under a scenario where temperatures are kept from rising below 2°C, demand for particular minerals will skyrocket, calculates the World Bank. Fundamental to energy storage technologies, lithium, graphite, and cobalt production will need to ramp up by more than 450 per cent by 2050.
Miners will need to apply decarbonization technologies to mining these minerals, too, but a transition to renewable energy would certainly lower the industry’s downstream emissions. Because despite their mineral intensity, renewables and storage technology are far less GHG-intensive than fossil fuels, comprising just 6 per cent of coal and gas generation under a 2°C scenario.
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EY. 2020. Top 10 business risks and opportunities for mining and metals in 2021.
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RioTinto. 2021. Scope 1, 2, and 3 emissions calculation methodology 2020. Sydney.
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—–. 2020. Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. Washington, DC: World Bank.