The age of transition

We must accept the political decision: we are headed into a Net Zero World. We live in an age of transition. Whether it is Brazil, China, the USA, Chile, Australia, or Canada, among many other countries, we are witnessing the need to shape our own futures in this world. This economy requires the products of mining to facilitate this transition. At Projects RH, we collaborate with companies that can thrive as a result of change. We have the choice to navigate the winds of change or leverage them and prosper:

• Green hydrogen, the energy we create from water!
• Rare Earths, the new set of critical minerals essential for decarbonization and the greening the economy.

Mining is extractive and consumes its own reserves

In recent years, there has been a growing focus on transitioning towards a decarbonized economy to combat climate change. This necessitates reducing reliance on fossil fuels, while finding alternative, renewable sources of energy. However, the mining industry - which plays a crucial role but is often overlooked - is unfairly cast as resistant to change. Given the industry's global experience, its members are accustomed to scrutiny and change.

Mining is an extractive industry, which consumes its own reserves, and is critical to extracting valuable minerals and geological materials from the earth. These materials are essential for producing goods and services used in our daily lives, such as smartphones, laptops, batteries, cars, and renewable energy technologies. Meeting the increasing demand for these products would be impossible without mining, as we transition toward a decarbonized economy.

Why mining is critical to decarbonization

Here are three reasons why mining is essential to creating a decarbonized economy:

1. Supplying materials for renewable energy technologies:

Renewable energy technologies such as solar panels, wind turbines, and batteries require minerals and metals that are mined from the earth. For example, rare earth elements like neodymium and dysprosium are crucial components in wind turbines, while lithium and cobalt are essential for electric car batteries. Without these minerals, the production of renewable energy technologies would come to a standstill, hindering our progress towards a decarbonized economy.

Moreover, as we continue to shift towards renewable energy sources, the demand for these minerals will only increase. This makes it even more important for the mining industry to keep up with this demand by developing sustainable extraction methods and finding new sources of these minerals. Many of these minerals once processed into a thing cannot currently be recycled.

2. Reducing carbon footprint:

Mining is often associated with negative environmental impacts such as air and water pollution. However, when compared to other industries such as manufacturing and transportation, mining has a relatively low carbon footprint. This is because mining companies have been investing in more efficient and sustainable practices in recent years.

For instance, advancements in technology have made it possible to mine for minerals in a more precise and targeted manner, reducing the amount of waste and energy required. In addition, many mining companies are now using renewable energy sources to power their operations, reducing their reliance on fossil fuels. At Projects RH we are currently working with a renewable energy group which is focused on working with mining companies.

Furthermore, as the demand for minerals and metals increases, companies are under pressure to find more sustainable ways of extracting them. This has led to the development of new technologies and processes such as using bacteria to extract metals from ores, reducing the need for traditional methods that produce high levels of carbon emissions.

3. Enhancing economic growth and job creation:

Mining plays a significant role in driving economic growth and job creation. In 2019, the mining industry contributed 2.9% to global GDP and supported 40 million jobs worldwide. In countries where mining is a major industry, it is often the backbone of the economy and provides employment opportunities for local communities.

In the transition towards a decarbonized economy, the demand for minerals and metals used in renewable energy technologies will only continue to grow. This presents an opportunity for developing countries with rich mineral reserves to boost their economies and create jobs.

Moreover, mining companies are increasingly focusing on sustainable practices and investing in local communities affected by their operations. This includes providing education, training, and job opportunities for local residents, as well as implementing environmental restoration projects. Such initiatives not only benefit the local communities but also contribute to creating a more sustainable future for all.

Today, most mining projects are held to respond on how they comply with the 16 targets of the UN’s charter on sustainability. Mining companies are generally held to account in the country in which they operate and from where they raise their capital. It is now common for the boards of mining companies to have to explain how they comply with shareholder and community expectations.

The Global Experience - The need for first-class behavior

Today mining companies need to report against rigorous standards set for their behavior and compliance.

In today's business world, mining companies have a significant responsibility to operate in an ethical and compliant manner. To ensure this, they are obligated to report against a rigorous set of standards that govern their behavior and practices. These standards are critical in promoting transparency, sustainability, and accountability in the mining industry. Companies that adhere to these standards gain public trust and enhance their reputation, ultimately contributing to the long-term success of their business. Therefore, it is imperative that mining companies not only comply with the strict regulations but also strive to continuously improve their performance through effective monitoring, evaluation, and reporting processes.

The reality is that should a mining company under-perform this will be know globally due the information efficiencies emerging from the internet impact.

The green commitment

The demand for rare earth elements, in particular, by Western countries for renewable energy production is only going to increase in the coming years. As we approach 2025, there is a sense of urgency to secure a domestic supply of these crucial elements. While this demand brings economic opportunities, it also highlights the need for responsible and sustainable mining and processing practices. It is essential for governments, industries, communities and consumers to work together towards securing a reliable and environmentally friendly supply of rare earth elements to meet the demand for renewable energy technologies. Only then can we truly achieve a greener and more sustainable future.

Mining requires a social license to be granted for companies to pursue their activities. If their behavior is inconsistent with this community-granted license the company will be punished at home by its shareholders and globally by activists.

Do you agree that mining companies should meet not only their contractual and community expectations to be granted the right to mine, or else they will face global exclusion from their industry?

By Paul Raftery, CEO of Projects RH. We are happy to receive questions of comments at paulraftery@projectsrh.com

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Source:

Grenville, S.; “Future Made in Australia: Treasury provides sanity in net zero transition”, The Weekend Australian. 1-2 June, 2024.