Leading the Charge
Overcoming challenges for an EV landscape
The International Council on Clean Transportation (ICCT) has made a research study on BEV emissions over time in Europe, the US, China and India, and concluded that 'the life-cycle emissions over the lifetime of BEVs registered today are lower than comparable gasoline cars’. When used with 100% renewable energy sources, an 81% GHG emission reduction is observed comparatively to gasoline.
The study took various types of power into account — diesel, gasoline, biofuels, hydrogen, natural gas and electricity— and concluded that out of internal combustion engine vehicles (ICEVs), encompassing hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs), and fuel cell electric vehicles (FCEVs), only BEVs and FCEVs have the capacity for deep decarbonization when it comes to passenger vehicles. A 15 to 18 year life cycle was considered, however, the report did not take into account emissions stemming from mining in order to produce the materials to manufacture the vehicles.
The IEA released a 2021 report stating that electric cars will require six times the amount of mineral input compared to a fuel-based car, and an off-shore wind power plant would require thirteen times the mineral resources than a gas-fired power plant of the same size. Though coal production currently accounts for more than 10 times the revenue of energy transition minerals, these numbers are projected to reverse by 2040.
Demand for lithium by this time is meant to increase by 42 times relative to 2020, graphite by 25, cobalt by 21, nickel by 19 and rare earths by seven times. “The metal mining industry is increasing its capacity just over 1% every year, but we will require seven times greater growth in years to come,” said Doug Morrison, president and CEO at the Centre of Excellence in Mining Innovation (CEMI).
China currently holds a clear leadership on transition mineral processing. "Roughly half of the world’s lithium is produced in Australia with the remainder produced in China and South America. Much of the world’s feedstock is then shipped to China to undergo conversion into chemicals. It is then transported to other markets, such as Japan and South Korea, to produce the active materials that go into batteries made for a variety of end uses,” said Trevor Walker, president and CEO of Frontier Lithium.
Electra Battery Materials’ target is to become the only one-stop-shop in North America to bridge the gap in the value chain. The company currently produces 25,000 mt/y of battery-grade cobalt sulphate. “If we do this, we will start to attract the precursor cathode manufacturers in Finland and China. In 2022, we will be commissioning and making our way into production,” revealed Trent Mell, Electra’s president and CEO.
Reporting ESG
Part of the journey towards an impactful ESG process will be to properly delineate the parameters required for reporting that take full life cycles into account. “There is no harmonization and clearly ample room for subjectivity in judgment, particularly where the standards are still trying to come together,” said Shaun Usmar, CEO of Triple Flag Precious Metals Corp.
“All mining companies, regardless of their size, release big statements of ESG targets without providing the data and evidence to support them, also known as ‘green washing’. These statements are not quantified,” said Laurie M. Clark, founder and CEO of Onyen Corporation. “Reporting should not be an expensive output. It should be quantitative, qualitative, substantiated, and easily dissected. The data sets should communicate the company’s pitfalls and guide it towards improvements,” she added.
Companies such as Onyen Corporation, Digbee and Minviro are focused on improving the industry’s ESG reporting standards to showcase the positive impact the sector has in communities, development and connectivity. “The willingness to submit to an external, impartial assessment and being transparent by publicly disclosing the underlying scores and data, warts and all, demonstrates a mature, secure leadership team that has a genuine commitment to ESG,” said Jamie Strauss, CEO of Digbee.
The mining sector still battles with pereception. “Companies like Patagonia and Terrex refuse to sell their products to extraction companies, even though the equipment they use to make their clothes are certainly not made of bamboo and plastic, and rely on metals at every stage of manufacturing. This anti-mining corporate attitude is ill placed and false. Mining takes up less space than Walmart parking lots around the world,” said Tom Obradovich, president and CEO of Conquest Resources. Having a unified ESG reporting strategy is pivotal for the sector. “Being aligned with global standards is much more relevant than worrying whether one should adopt one or another standard,” added Digbee’s Jamie Strauss. “If we achieve our goals during the next few years, this industry will not be at the bottom of the S&P 500, and that has a direct impact on valuation,” he added.
Minviro helps companies mitigate environmental impact by applying the life cycle assessment (LCA) approach. Minviro supported First Cobalt in this way, comparing peers with cobalt refineries in China to quantify impact. It is currently helping Australian Pilbara lower its CO2 density per kg. Minviro also aims to release its MineBIT tool in 2022: “This will allow clients to design their supply chain based on their LCA. This is very important because we are seeing a lot of regulations trying to make sure that batteries and EVs have minimal impacts, and sourcing your materials from one supplier or another can really make a difference," said Robert Pell, founder and CEO, Minviro.
How efficiently companies report their ESG is still often dictated by internal business protocols and criteria. As the sector gains insights and support to understand international standards, such as the GHG protocol, and translates them into actionable steps, ESG reporting standards will continuously improve. “To benchmark best practices and fast track the whole process of ESG reporting and disclosure, we launched ESG 101, an information portal for issuers, and entered into an agreement with IHS Markit to create an ESG Reporting Repository, a portal focused on providing centralized and streamlined data to investors,” said Dean McPherson, head of business development global mining at Toronto Stock Exchange and TSX Venture Exchange.
Images courtesy of SPC Nickel and Frontier Lithium