Editorial Feature

Accelerating Decarbonization in Mining

Amidst urgent climate concerns and the growing demand for renewable energy, the mining sector is transforming significantly. This article delves into the roles of innovative technologies in guiding the industry toward a sustainable and economically viable future, underscoring how decarbonization is not just a necessity but an opportunity for profound transformation.

Accelerating Decarbonization in Mining

Image Credit: Christoph Schaarschmidt/Shutterstock.com

Why is Mining Shifting Toward Greener Practices?

Mining decarbonization aims to balance the essential production of minerals for renewable energy with the imperative to reduce carbon emissions, addressing environmental concerns and evolving market demands.

According to PwC's 26th Annual Global CEO Survey, 35% of mining CEOs foresee significant climate risks in the next five years, propelling the industry toward more sustainable practices (PwC, 2023).

In terms of environmental impact, the mining industry is responsible for approximately 1.9 to 5.1 gigatons of CO2 equivalent emissions annually, predominantly from coal mining and power consumption. This is further exacerbated by the broader metal industry, particularly steel and aluminum production, contributing an additional 4.2 gigatons of CO2 equivalent emissions yearly.

To align with the Paris Agreement's objectives, the industry must cut emissions by 50% by 2050 to maintain a 2 °C scenario and by 85% for a 1.5 °C scenario (Delevingne et al., 2020).

The industry also faces increasing pressure from investors, regulators, and customers to pursue decarbonization. The Task Force on Climate-related Financial Disclosures (TCFD) underscores the importance of reporting transition risks under a 2°C decarbonization scenario, emphasizing the need for the mining sector to adapt its strategies and operations to reduce its carbon footprint significantly (Delevingne et al., 2020).

How are New Technologies Fueling Decarbonization in Mining?

New technologies significantly propel the transformation of the mining industry toward lower emissions. Key to this shift are approaches like direct electrification, efficiency improvements, and the utilization of renewable energy sources, including solar and wind power.

Notable achievements include the Sibanye-Stillwater mine in South Africa, which reduced its energy consumption by 62% by optimizing its ventilation systems. Similarly, Rio Tinto's Gudai-Darri mine in Western Australia has seen a 15 to 20% increase in output coupled with reduced costs and fuel consumption, thanks to the introduction of driverless vehicles (PwC, 2023).

The growing feasibility of renewable energy is also making a significant impact. For instance, Chile's Codelco has demonstrated this by cutting its CO2 emissions by 15,000 tons and saving US$2 million annually through solar power usage (PwC, 2023).

Additionally, hydrogen-powered solutions in transport and steelmaking are gaining traction for their substantial CO2 emission reduction capabilities, as seen in Anglo-American's Mogalakwena mine in South Africa, which has started using hydrogen-powered trucks (PwC, 2023).

These advancements, combined with collaborative projects like the Hybrit initiative for producing fossil-free steel, underscore the industry's commitment to adopting new strategies to cater to the increasing demand for low-carbon minerals and metals vital for clean energy technologies.

What Role Do Partnerships Play in Achieving Decarbonization Goals?

Partnerships are pivotal in driving decarbonization efforts within the mining sector. These collaborations, encompassing mining companies, processors, and energy providers, are crucial for enhancing efficiency, sharing risks, and promoting sustainable production practices.

A prime example of such collaboration is the Hybrit project, a joint effort between mining company LKAB, steel producer SSAB, and power utility Vattenfall. This project aims to produce green steel for the automotive industry, specifically for Volvo, aiming to reach commercial-scale fossil-free steel production by 2026 (PwC, 2023).

Rio Tinto's partnership with Landsvirkjun also exemplifies this trend. Rio Tinto's ISAL aluminum smelter in Iceland employs 100% renewable electricity to manufacture low-carbon aluminum, demonstrating a successful model of sustainable industry practices (PwC, 2023).

Moreover, the International Finance Corporation (IFC) has introduced the Net-Zero Roadmap for Copper and Nickel Mining Value Chains. This initiative will direct the critical mineral mining sector toward achieving net-zero emissions by 2050.

The roadmap suggests actionable strategies such as adopting renewable technologies, improving energy efficiency, and embracing digitization. It also fosters collaboration across the industry, involving companies in the mining value chain, policymakers, and sustainable finance investors to collectively work towards decarbonization (IFC, 2023).

Financial Incentives and Challenges: Balancing Risks and Opportunities in Green Finance

The transition to green finance in the mining sector presents both opportunities and challenges. On one hand, the growth of sustainability-related bonds offers new financing avenues. For instance, the volume of green bonds has escalated dramatically, from around US$150 billion in 2017 to US$450 billion in 2022, with an expected increase of 30% in 2023 (PwC, 2023).

Major mining companies like Newmont and Anglo-American have successfully issued substantial sustainability-linked bonds, signifying a shift toward more environmentally responsible investment strategies. However, this shift also poses challenges, particularly for operations reliant on fossil fuels.

With increasing investor focus on environmental, social, and governance (ESG) criteria, mining companies heavily involved in fossil fuels face difficulties accessing capital from traditional sources. This challenge is compounded by the ongoing global energy crisis and rising costs, which demand a delicate balance between energy security, affordability, and transitioning to greener practices (Letty, 2023).

Future Developments in Mining Decarbonization

As the mining industry embarks on a transformative journey toward decarbonization, the future envisages a significant shift towards renewable technologies and eco-friendly refining processes. The advancements, like those seen in the Hybrit project and Rio Tinto's initiatives, highlight a growing commitment to sustainable operations.

The increasing inclination toward green finance, marked by the rise of sustainability-linked bonds, reshapes the industry's financial landscape. This evolution in mining practices and financing models aligns with global climate goals and positions the mining sector as a pivotal player in the broader transition to a sustainable and low-carbon economy.

The ongoing collaboration and innovation will continue to drive the industry toward a future where mining operations meet the demand for critical minerals and do so in an environmentally responsible and economically viable way.

References and Further Reading

PwC (2023). Mine 2023: 20th Edition. The Era of Reinvention. [Online] PwC. Available at: https://www.pwc.com/gx/en/issues/tla/content/PwC-Mine-Report-2023.pdf (Accessed on 13 December 2023).

Delevingne, L., et al. (2020). Climate risk and decarbonization: What every mining CEO needs to know. [Online] McKinsey. Available at: https://www.mckinsey.com/capabilities/sustainability/our-insights/climate-risk-and-decarbonization-what-every-mining-ceo-needs-to-know (Accessed on 13 December 2023).

Hund, K. L., et al. (2019). Changing Mining Practices and Greening Value Chains for a Low-Carbon World. [Online] IGF Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development. Available at: https://www.igfmining.org/changing-mining-practices-and-greening-value-chains-for-a-low-carbon-world/ (Accessed on 13 December 2023).

Deloitte (2023). Tracking the trends 2023 The indispensable role of mining and metals. [Online] Deloitte. Available at: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-Resources/gx-tracking-the-trends-2023-Digital-V2.pdf (Accessed on 14 December 2023).

IFC (2023). New Roadmap from IFC and Partners Outlines Net-Zero Pathways for Mining Green Tech Metals. [Online] IFC International Finance Corporation. Available at: https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=27390 (Accessed on 14 December 2023).

Letty (2023). Global mining: Key sustainability trends in 2023. [Online] The Mining Executive. Available at: https://theminingexecutive.com/global-mining-key-sustainability-trends-in-2023/ (Accessed on 14 December 2023).

Disclaimer: The views expressed here are those of the author expressed in their private capacity and do not necessarily represent the views of AZoM.com Limited T/A AZoNetwork the owner and operator of this website. This disclaimer forms part of the Terms and conditions of use of this website.

Rachael Jones

Written by

Rachael Jones

Rachael Jones, a freelance writer with an MSc in Earth Science and a PGDip in Environmental Management, merges her extensive academic background with years of publishing and editing experience. Focused on digital marketing within the science and technology sectors, Rachael excels in creating compelling narratives that connect intricate scientific ideas with a wider online audience.

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