INVESTOR PRESSURE MOUNTS ON MINERS TO DECARBONIZE
A recent article from S&P Global Intelligence points to increasing pressure from investors on mining companies to lower their carbon footprints.
In part, this is because of 30 mining companies surveyed, only eight are fully and publicly committed to reaching net zero carbon in their activities by 2050, in alignment with the Paris climate accords. But investors, governments and other influencers are focusing on other factors as well.
Because mined materials are the starting point in the supply chain for much of the global economy, decarbonizing the sector is critical to meeting global emissions targets, particularly as a growing energy transition increases the demand for critical raw materials. In addition, miners are increasingly being held to account not only for their own emissions but also for those that occur from the downstream use of their commodities in many sectors of the economy.
Some miners are approaching this risk more aggressively than others. The article quotes James Whiteside, research director and global head of multicommodity research at Wood Mackenzie: "In some ways, it's out of their hands and that's the attitude. Once a product leaves the mine gate, they have no sway over what it's used for and what its emissions are," Whiteside said. "I think increasingly investors are going to question that."
Mining is responsible for 4% to 7% of global greenhouse gas emissions in terms of the sector's Scope 1 and Scope 2 emissions, according to January estimates from McKinsey & Co. In addition, half of the global industrial greenhouse gas emissions in 2015 were traced to just 50 companies in heavy fossil fuel industries, including 20 mining companies, according to a report from the Carbon Disclosure Project.
Still, so far, “most of the measures that have been brought in have been just focused on power generation," Whiteside said. "But increasingly, it's looking like carbon pricing will be brought in on metals production as well. I think there's a lot of cognizance, from investors in particular, about the emissions intensity of the assets in a company's portfolio."
With this in mind, many of the largest mining companies will need to rebalance their own portfolios. According to Oliver Ramsbottom, a partner at McKinsey & Co., while coal miners may see demand rapidly decline, new technologies supporting decarbonization efforts, including wind turbines, solar photovoltaics, electric vehicles, and energy storage will increase demand for other mined materials. For example, electric vehicles and battery storage are likely to create growth markets for lithium, nickel and cobalt. At the same time, emerging technologies in hydrogen fuel cells and carbon capture could boost demand for platinum, palladium and other materials.
Ramsbottom said mining companies had previously thought more locally about their impact but are now thinking strategically and operationally to address the global challenge. Many are dropping exposure to commodities with a substantial carbon footprint and are increasing exposure to commodities used in batteries or other renewable energy technology. They are also looking at things such as reducing water usage or swapping diesel trucks for electric vehicles at the mine site.
Read the full article here. Thanks to Energy and Mines for bringing this article to our attention.
AUSTRALIAN MINES MAKES HISTORY WITH CERTIFIED CARBON NEUTRAL STATUS
Australian Mines says it has become the first mineral resources company to be certified a “Carbon Neutral Organisation” under the Australian Government’s Climate Active program, according to Daniel Gleeson of International Mining.
In Gleeson’s post, the company describes Climate Active as “the most rigorous and credible carbon neutral certification available in Australia.” Meeting the Climate Active Carbon Neutral Standard, says the company, “means Australian Mines’ carbon neutral status is based on best practice, international standards and genuine emissions reductions.”
“Australian Mines ability to maintain carbon neutral certification will underpin its position as a sustainable business that incorporates leading environmental, social and governance (ESG) practices,” it said. The company is already an approved member of the Initiative for Responsible Mining Assurance (IRMA), which independently verifies and certifies socially and environmentally responsible mining.
“Being certified Carbon Neutral by Climate Active is part of building a sustainable future for Australian Mines, long-term value for our shareholders and a better environment for all our stakeholders,” Bell said. “Members of the Climate Active Network are responsible for over 22 Mt of carbon emissions being offset, which is the equivalent of taking all of Sydney’s cars off the road for two years.”
WEIR MINERALS CUTS COSTS AND EMISSIONS WITH INNOVATIVE SOLAR PPA
Weir Minerals, a leading supplier to Australia’s resources sector, has announced an innovative power purchase agreement with French energy giant Engie, according to an article in RenewEconomy.
The agreement enables Weir to cut its emissions footprint through the sourcing of renewable electricity from solar farms under a deal with Engie.
“Weir’s clear focus on making mining more sustainable and efficient includes leading by example and reducing the footprint of our own operations,” Weir Minerals environmental engineer Jazib Farid is quoted as saying.
The deal will help Weir Minerals progress towards meeting its stated target of reducing emissions by 50 percent by 2030. The PPA will also help Weir Minerals control its energy costs, by locking in a fixed price for power supplied by Engie.
“ENGIE is in a unique position to utilise our understanding of the wholesale energy market to design solutions for customers transitioning to a carbon-neutral economy. For the Australian mining sector specifically, renewable PPAs offer price and stability benefits which can underpin and enable investments and the greening of supply chains,” ENGIE ANZ executive general manager of energy management, Andrew Hyland, said.