The mining industry is starting to act on climate change, but it needs to do more. Investors need to push management teams to identify how they will respond to climate change policies and investor pressure. Mining companies can respond most effectively by setting targets for absolute reductions. Another option involves focusing on energy transition materials such as cobalt and lithium.
Responsible Mining in a Low-Carbon World
The mining industry is a small part of the overall economy, but its impact is significant. The industry creates and sustains millions of jobs worldwide, and minerals are essential for the development of modern technology. The industry can be a leader in the transition to a low-carbon economy and should commit to this goal.
The mining industry is starting to act on climate change, but it needs to do more. Investors need to push management teams to identify how they will respond to climate change policies and investor pressure.
Ways to Reduce Emissions
Mining companies can respond most effectively by setting targets for absolute reductions. The first is a reduction in operational emissions. This means that miners need to improve the efficiency of their processes and reduce their greenhouse gas emissions. Another option involves focusing on energy transition materials. This can be done by targeting energy transition materials such as cobalt and lithium, which are needed to make electric vehicles work. The industry also needs to continue with coal divestment as coal is not an environmentally friendly option and is causing more harm than good.
Carbon Capture and Storage (CCS)
One last way the industry can respond most effectively to climate change policies and investor pressure is by focusing on carbon capture and storage (CCS). In this method, carbon dioxide is captured from fossil fuel-powered power stations or from industrial plants making hydrogen and then transported via pipelines to the geological storage site. The carbon dioxide is permanently stored in depleted oil or gas fields or in unmineable coal seams.
The Mining Industry’s Response to Climate Risks
Every part of the economy would need to decarbonize to achieve a 1.5 degree Celsius warming pathway. Yet actions taken to date by the mining industry are too modest to reach this scenario. Mining companies concerned about their long-term reputation, “license to operate,” or contribution to decarbonization efforts may start to consider more aggressive decarbonization and resilience plans, even as part of their recovery agendas for the post-COVID-19 period.