The Move to Combat Climate Change Gathers Pace
A decisive moment for the planet’s future
The transition towards electrification and the ‘green-revolution’ is one born out of necessity. The impact of climate change has rippled across the world, with U.N. Secretary-General António Guterres speaking of a "code red for humanity” following a report generated by scientists at the Intergovernmental Panel on Climate Change (IPCC). Only the most optimistic out of five proposed future scenarios presents a world that meets the Paris Agreement’s goal of keeping global warming capped at around 1.5 degrees Celsius.
Each of the five scenarios in the report detail varying degrees of irreversible human impact on Earth. An urgent lowering of carbon emissions is required and electrification and the green energy revolution have been presented as the means to achieve this. Energy research and consultancy firm Wood Mackenzie forecasts that to limit global warming to 2 degrees Celsius by 2030, the following mining developments will be necessary: 20 new lithium mines the size of Greenbushes in Australia (the largest in the world); 10 new cobalt mines the size of Mutanda in DRC; 22 new nickel operations the size of Ambatovy in Madagascar.
For development on this scale to become even remotely feasible, greater acceptance of mining is paramount. In turn, mining companies are placing an emphasis on net zero emissions targets. “We have made the commitment to reduce our carbon footprint by 30% by 2030 and to have net zero emissions by 2050. […] Buying carbon credits to achieve this goal is our least preferred option. Instead, we expect to reduce our footprint by accessing renewable power, since 70% of our emissions are through energy consumption,” said Jake Klein, executive chairman of Evolution Mining.
“As ESG came into the spotlight, water management followed so companies are more proactive in that respect. Even if we do not see major action being taken yet across all mining companies, the fact it is now a topic of conversation is cause for celebration. We foresee a lot more action being taken regarding water treatment in the coming years.”
Eric Lannegrace, Managing Director & Founder, minera Environmental Solutions
Many remain skeptical of the ambitious zero emissions target. “Becoming a fully electric-powered society will likely not occur by 2050,” said Egizio Bianchini, head of metals and mining investment banking at Stifel GMP. “The world cannot overcome its addiction to hydrocarbons unless dramatic action is taken,” he added.
A reliance on renewable energy does not mean that our carbon footprint can be reduced to zero. “There is more energy in a barrel of oil than in ten solar panel fields, and to manufacture solar panels, more carbon is created in the atmosphere than for the making of one barrel of oil. Producing the metals required for EVs will also lead to increased greenhouse gases. It is unrealistic and naive to assume that we will somehow eradicate fossil fuels,” stated Tom Obradovich, president and CEO of Conquest Resources. “What can be done, however, is to manage the exhaust of fossil fuels using better technologies to recover carbon from the exhaust fumes”, he added.
Further challenges are revealed when reliance on uncontrollable natural phenomena, such as wind, forces renewable energy companies to have fossil fuel power plants as backups waiting to be utilized. With the technology, innovation and resources we have today, the blueprint for a net zero carbon world by 2050 is not yet clear. Nonetheless, a change is necessary and demand will only increase. “A key driver for the market is the global green energy revolution which promotes electric and battery-powered vehicles. There is a solid demand for copper, nickel, battery metals and we see a healthy pipeline of projects,” said Paul Healy, president of the Americas at Redpath Mining.
Though emissions are eliminated throughout use, vehicles must be charged, often relying on fossil fuel-based power sources to do so. “When people talk about net zero and zero carbon emissions, I do not think anybody really knows what that means since a footprint of some sort will always exist. One can only really mitigate,” said Trent Mell, president and CEO of Electra Battery Materials (previously First Cobalt).
Solar and wind power are often presented as key solutions to shifting the pendulum, given that fossil fuels still control most of the world’s energy mix, however, neither is yet capable of powering large-scale operations. The largest solar farm in the world, the Bhadla Solar Park in India, can only produce power for about four and a half million homes. However, wind power now makes up 4.7% of power generation in the US and 3.3% in China, and technology is rapidly evolving. "Instead of a fossil fuel backup, the possibility for a battery backup is there, and many companies have already started to incorporate battery backups for their renewable energy sources, where the batteries can also be charged on renewables,” said Emily Thorn Corthay, founder and CEO, Thorn Associates.
To properly measure the impact that electrification and green energy has on the world, an umbrella vision approach must be taken. “The starting point here is reducing carbon emissions, but we need to mature our approach being cognizant of the inputs into the solutions. The lifecycle of these products needs to be a part of the equation, such as the concept of the circular economy. We cannot have an automotive company making electric vehicles, yet sourcing nickel, which has a high GHG footprint to produce the metal. You cannot make a solution that has a dirty process. We will need to move along the maturity curve to truly reach a net benefit for the world,” said Ryan McEachern, managing director of MSTA Canada.
Abraham Drost, CEO of Clean Air Metals, spoke of Norway paving the way in the long-term green energy realm while still relying heavily on hydrocarbons. “We cannot all go back to living on the farm and growing vegetables…. Although people are willing to sacrifice to some extent for the planet, lifestyle demands will not change as they become more green energy intensive,” he added.
In Ontario, mining companies can often connect to the provincial power grid accessing low cost electric power through hydro. “In Ontario, our electrical grid is essentially carbon-free, giving us a considerable advantage on GHG emissions. The whole supply chain must be green to achieve green inputs in operations and our association has been focused on delivering on Target Zero+ goals: that is, mining with zero harm to workers, zero carbon, and zero waste, while improving productivity,” said Chris Hodgson, president of the Ontario Mining Association (OMA).
Roth Canada’s Braden Fletcher believes the International Energy Agency’s (IEA) 19% growth in energy demand by 2040 forecast cannot be solely based on renewables. “Nuclear is going to be a necessity. Global stockpiles are in decline, and that should be positive for uranium,” he said.
Image courtesy of Goldshore Resources