Following our recent trip to the 2019 convention of the Prospectors and Developers Association of Canada (PDAC) we share our thoughts on climate change and the growing responsibility of stakeholders within the extractives industry to be more sustainable in their approach to mining.
Accounting for 50 per cent of total global greenhouse gas emissions and more than 90 per cent of biodiversity loss, the extraction and processing of materials, fuels and food has a lot to answer for.
These figures, released in the Global Resources Outlook 2019 report at the UNEP Headquarters Nairobi, reveal that rapid growth in the extraction of minerals is the single biggest offender in climate change, land-use changes and an 11 per cent loss in global species. It is no surprise then that sustainability issues were front of mind at the 2019 convention of the Prospectors and Developers Association of Canada (PDAC).
As the United Nations calls for urgent action on climate change, the mining sector is seeking to redefine its image from climate offender to one which is a sustainable and responsible source of sought-after world minerals as extractions reach all-time highs.
The Global Resources Outlook reveals that extraction of materials grew more than threefold from 1970 to 2017 from 27 billion tonnes to 92 billion tonnes - and that, in turn, is predicted to double by 2060.
This increasing demand for precious metals presents the mining industry with real challenges but also the opportunity to take a leadership role in addressing global environmental issues – and one they must take.
The mining industry can offer much of the expertise needed to tackle climate change as well as provide many elements essential to the development of green technologies and the industry is already making considerable headway. For example, adopting extended product life cycles, intelligent product design and reuse recycling and remanufacturing are already innovations being embraced to lessen over-reliance on extractives across the globe.
License to Operate
Encouragingly, sustainability on the investment side is changing quickly and consequently the past three to four years have seen a noticeable shift from extractives companies spending money on putting more holes in the ground (exploration) to improving the way the business operates as a whole. Climate change is very much front of mind for investors and so it is essential the mining industry takes heed.
ESG Integration – Environment, Social and Government – is paramount in decision making for those seeking to invest and, consequently, the stakeholder landscape is shifting. In EY’s Top 10 business risks facing mining and metals 2019-2020 “License to operate” tops the polls - up from number 7 in 2018. In fact, the majority, (54 per cent) of over 200 executives surveyed said this was their single biggest business risk.
Commitments and contributions to community, government, employees and environment now extend beyond the life of the mine. As one of the most energy-intensive sectors and one of those most impacted by climate change, stakeholders are turning their efforts toward the transition to a low carbon economy.
There is room for collaboration between the mining industry and environmentalists. Take Proteus – a unique collaboration between leading extractives and the UN Environment World Conservation Monitoring Centre (UNEP-WCMC) established in 2003 - which allows the business and conservation communities to join forces to make global information on biodiversity available. Organisations such as Proteus are pioneering change within the extractives industry, focusing efforts on major mining players to optimise impact.
However, to make the transition to a low carbon economy each player in the mining industry will need to take action – whether a junior entrant or multi-billion tycoon.
Mining is an energy-intensive sector where capital and operating costs represent a significant expense for mining companies. In fact, energy accounts for up to a third of a company’s total cost base. To minimise these risks companies are increasingly opting for a combination of energy sources, introducing hydroelectricity and renewable energy.
At the same time, mining companies are implementing cost and emission reductions by replacing diesel-powered equipment with electric ones. A diesel engine, for example, typically consists of 2000-2500 parts whereas an electric engine has around half that, offers better performance and preventative maintenance, and delivers significant reductions in greenhouse gas emissions.
Sustainable Mining - CDE
This has not gone unlost on key industry players. Goldcorp Inc. plans to unveil the first all-electric underground mine in Canada at its Borden gold mine in Ontario which is set to have a significant impact. Statistics reveal that this would result in a significant halving of total greenhouse gases (GHGs) on site – preventing the release of 7500 tonnes of carbon dioxide into the environment and cutting 3 million litres of fuel each year (read more at icmm.com).
This goes some way to show that mining companies are making commitments to develop GHG emission reduction strategies and implement economic emissions reductions opportunities that ensure efficient use of natural resources.
It also highlights that the ultimate solution rests in the development of novel ultra-efficient energy systems for mining operations making them more environmentally friendly, cost-effective and ultimately sustainable – for both the environment and mining industry.
A New World of Resource
At PDAC 2019 we presented CDE’s unique wet processing technology as part of the Ireland – Open for Business forum, showcasing the commitment to innovation and circular economy that this Northern-Irish-founded company brings to industry.
CDE has made it its business to create a new world of resource and for more than 25 years has developed patented, novel solutions for industrial recycling which not only protect and extend the life of the earth’s finite natural resources but adds value to the customer’s bottom line.
Take mining for example where CDE delivers modular, all electric, light-weight and technologically advanced plants, maximising investment through reduced CAPEX and OPEX while unlocking value in mine waste and low-grade ores. CDE’s expertise as a pioneer in generating value from waste using the most sustainable methods -which started in the UK more than two decades ago, is now utilised in countries as diverse as Australia, Asia and South Africa.
Mining and Climate Change - CDE
CDE Meta – the CDE business sector devoted to mining - is upgrading millions of tonnes of legacy mining waste converting waste dumps into high-grade ores and finding value in the aggregates portion left behind.
In South America CDE technology negates the need for tailings ponds completely, intercepting waste slurry lines and applying state of the art hydro-cyclone and de-watering technology to recover valuable ore fractions whilst simultaneously creating materials for road brick manufacture and land rehabilitation from the so-called waste.
This all goes to show that collectively, as an industry, clean technologies to maximise the value from the extractives industry is very achievable.
CDE Meta seeks to maximise mining reserves in a New World of Resource. Importantly, this means providing solutions to enable junior miners to improve their energy and emissions track, while still serving the environmental regimes of established multi-nationals.
The right thing to do (for future sustainable growth)
Minerals and metals are required for many of today’s low carbon technologies. Copper, aluminium, platinum, lithium and non-metallurgical coal are vital for developing a renewable energy infrastructure.
Electric vehicles, catalytic converters and renewable energy sources such as wind turbines and photovoltaic solar are just a few examples of alternative energy technologies which rely on the mining and metals industry for product development and manufacturing. The rise of hydrogen technologies as the only 100% carbon free energy source will undoubtedly put pressure on the platinum market.
As the world strives towards a low-carbon economy, the mining and metals industry is, and has to be, a crucial part of the solution.
Undoubtedly then, the right thing to do to ensure future sustainable growth is to make it mandatory to state ESG and Climate Change factors in return for Capital. In turn, every business operating within the extractives industry has a role to play, and offsetting risk will inherently create better returns.
In its 2019-2020 report Top 10 business risks facing mining and metals, EY recommends that companies should focus on sustainable cost reduction programs, turning attention to review capital tied up in high levels of pre-stripping, advance development and stockpiles.
CDE in co-creation with its customers cites years of pedigree and demonstrable evidence of unlocking value in previously perceived mining overburden, applying novel technologies to minimise environmental footprint and maximise returns.
In today’s world, large amounts of natural resources are required to fuel economic development at a time where there is, rightly, an increased focus in human well-being. Thus, while meeting demand, climate change, price of carbon and sustainability all form part of the mining industry longevity and impact equation.
The extractives industry is already taking action. From the junior space to the household names, the conclusion is that no company is too small to start – or play its part