- Banks and shareholders are putting pressure on miners to enhance their environmental standards; They strive for net-zero carbon emissions at direct mining operations and value chains
- Historically, the sector has been responsible for many worker accidents and fatalities. As a result, it would be simple to dismiss the entire industry as an ecologically and socially unsustainable remnant of the industrial past
- South Africa’s future of sustainable mining methods is considered a bellwether for the most significant African sector since it is the continent’s largest centre of mining activity
The mining sector is under increasing pressure to embrace more ecologically and socially sustainable African methods. With lenders and investors requiring reductions in greenhouse gas emissions, pollution and advancements in the workforce and community well-being, there is a widespread perception that it is in the industry’s best interests to adopt more responsible practices to increase productivity and avoid negative publicity.
The mining industry is very intrusive by nature, requiring enormous amounts of energy and the removal of large quantities of soil and rock, resulting in significant local contamination during extraction and transportation.
Historically, the sector has been responsible for many worker accidents and fatalities. As a result, it would be simple to dismiss the entire industry as an ecologically and socially unsustainable remnant of the industrial past.
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Indeed, thermal coal output has already begun to decline in some markets, with coking coal expected to follow if the cost of new smelting technology falls sufficiently.
Some firms have also abandoned natural diamonds in favour of synthetic stones. Iron ore and bauxite mining, on the other hand, will remain for many decades to support steel manufacturing, while manganese, cobalt, and copper are employed in many emerging technologies.
It entails weeding out fraudulent activities in the sector, including procurement, employment, and licensing. Sustainable mining also necessitates the development of a feasible mine closure plan that includes appropriate funding for post-close rehabilitation. Simultaneously, sustainable techniques can increase the longevity of mining operations, which has clear monetary benefits.
The cost of mining on the environment
Banks and shareholders are putting pressure on miners to enhance their environmental standards. They strive for net-zero carbon emissions at direct mining operations and value chains.
Mining currently accounts for 4-7 per cent of global greenhouse gas emissions. Still, mining companies typically set short-term low reduction targets or focus on emission intensity rather than absolute numbers, despite the potential for transformation, according to a McKinsey report on climate risk and de-carbonization.
“Mines have the potential to de-carbonize (excluding fugitive methane) through operational efficiency, electrification, and the use of renewable energy.” “While capital investments are necessary to realize the majority of the de-carbonization potential, certain initiatives, such as renewable energy adoption, electrification, and operational efficiency, are economically feasible today for many mines,” according to the research.
This change will need the development of totally new business models. Coal, which presently accounts for almost half of the worldwide mining sector, will face rising pressure. However, minerals utilized in green technologies, such as bauxite, copper, and iron ore, will benefit from new de-carbonization technology.
“Niche commodities are unlikely to match the scale of coal revenues, but they may assist in control losses.” “A rebalanced portfolio for miners would necessitate agility – smart market information and adaptable assets – which may become a competitive advantage in enabling reactions to mineral-demand fluctuations,” the authors write.
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This move comprises mining accepting renewable energy and boosting operational efficiency.”The possibility for mine de-carbonization varies by commodity, mine type, power source, and grid emissions, among other considerations.” Non-coal miners might entirely de-carbonize the business by utilizing a variety of levers. Some are more cost-effective than others; for example, operational efficiency may enable incremental improvements to the energy intensity of mining operations while needing little capital investment. “Moving to renewable energy sources is becoming more viable, even in off-grid areas, since the cost of battery packs is expected to fall by half between 2017 and 2030.”
End “Greenwashing”
While the potential for new business models is evident, it is all too easy for sustainable mining declarations and plans to be viewed as side issues rather than key considerations embedded into a company’s whole operations.
Companies that engage in “greenwashing” may publicize their efforts without achieving genuine change. According to experts, it is critical to establish monitoring and enforcement methods, with change being public and quantifiable.
In a research report on African mining in a post-Covid world, EY experts stated that mining businesses must “create, capture, and deliver value to a larger range of stakeholders than ever before” by targeting longer-term sustainability.
The shift to sustainability is more likely to be a process than an event, but outstanding leadership may make a difference. The Botswana mining sector recognized this as early as 2017 when the Botswana Chamber of Mines (BCM) embraced the Mining Association of Canada’s Towards Sustainable Mining (TSM) corporate social responsibility (CSR) initiative to enhance environmental and social standards in the industry.
TSM mandates businesses in Botswana to conduct yearly evaluations of different indicators such as energy consumption, greenhouse gas emissions, health and safety, community outreach, and biodiversity protection. They must also provide more openness and accountability, with the established standards likely to be on par with Canada’s. To oversee the process, the BCM established an impartial multi-stakeholder panel.
Can South Africa set the example?
South Africa’s future of sustainable mining methods is considered a bellwether for the most significant African sector since it is the continent’s largest centre of mining activity. Firms headquartered in the nation are expected to work with community groups, labour unions, and government agencies to create company-wide CSR programs. Companies are evaluated monthly for their success in removing apartheid-era socioeconomic hurdles, notably in terms of educating and promoting black people for senior positions and hiring and promoting women and workers with disabilities.
Some of these objectives appear to be attainable. After mines closure, environmental restoration is feasible, which improves biodiversity, while boosting the fortunes of local mining communities can help the business by lessening resistance and generating a more motivated staff. Achieving carbon-neutral mining will be more difficult: although renewable energy generation is feasible, achieving zero carbon in other company operations elements may be more difficult.
Anglo American entered into a partnership with EDF Renewables in March to meet 100 per cent of the company’s electricity needs in South Africa with renewable energy by 2030. South Africa’s solar and wind power businesses have exploded due to rich local resources and rapidly reducing development costs. However, a lack of government backing due to the impact on the coal sector has hindered the country’s adoption of renewable energy.
However, failing to embrace more sustainable practices carries its hazards. FTI Consulting’s Mining Sustainability in South Africa research published in 2020 identified three significant hazards to the country’s mining sector: energy, water, and corruption. Power supplies are unstable, but lowering miners’ dependency on Eskom, the national power company will help mitigate operating halts caused by power shortages.
According to the research, “developing strategies to minimize water use, boost productivity, and prevent water quality contamination will be crucial sustainability projects.” More effective water management may also minimize the high expenses of waste.”Finally, it warned of the continuing potential of corruption in the approval of mining rights and operating licenses, the supply of jobs, and the awarding of supplier contracts.
Sustainable mining will eventually make sense for CEOs not only because it improves the environment but also because it benefits the corporations involved. The following decades will show if the sector is adaptable.
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