Mining industry’s ‘green metals’ a mistake, experts say

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The green theme is driven by the rage for environmentally and socially responsible investments, which experts say have pressured miners to improve their environmental footprint.

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The mining industry is promoting an increasing number of metals as green. The label appears everywhere: on the landing pages of company websites, in speeches by mining executives at conferences and in pitch meetings with investors.

“Every nickel project is now green, every copper project is green,” said Doug Pollitt, analyst at Pollitt & Co. “The resource sector is making the most of it.”

The green nickname, which implies that the metals and mining methods are environmentally friendly, provokes a lively debate. Some call it appropriate, given the increasing end use of minerals such as lithium, cobalt and graphite in alternative energies. Others, taking into account the complete life cycle of metals from the ground to the customer, find the framing deceptive and misleading.

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“Lots of marketing” is what Mr. Pollitt calls it.

The green theme is motivated by the rage of environmentally and socially responsible investments, which experts say have put pressure on miners to improve their environmental footprint.

“Like any other industry, mining needs to paint itself in an ESG fabric right now,” said Rick Rule, former CEO of Sprott US Holdings and investor in natural resources. “ESG is part of the cost of capital.

One of the first mentions of green metals came from mining manager Robert Friedland, founder of copper miner Ivanhoe Mines Ltd. In 2004, he called platinum, copper, and nickel greens due to their increasing use in hybrid cars.

He is currently using the term to promote his latest high-priced venture, Ivanhoe’s new Kamoa-Kakula copper mine in the Democratic Republic of Congo (DRC), which he says is one of the greenest in the industry. , in part because Kamoa – Kakula’s electricity comes from clean hydropower.

Ivanhoe has also committed to using an electric or hydrogen mining fleet to further reduce on-site emissions. Mr. Friedland declined to be interviewed for this story.

Teck Resources Ltd. , which derives the largest percentage of its income from metallurgical coal mining, is also increasingly presenting itself as a green miner. This is in part because of Teak’s increasing exposure to copper, which is increasingly used in alternative energy.

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“This strategy is anchored in our QB2 copper project in Chile, which is expected to double our consolidated copper production by 2023,” Teck spokesperson Chris Stannell wrote in an email to The Globe and Mail.

But once the copper industry’s emissions from mining, refining and transporting the metal are factored in, the green label becomes more tenuous.

Samuel Julio Friedmann, a senior researcher at Columbia University’s Center for World Energy Policy, who wrote energy briefs for former US President Barack Obama, said that referring to an industrial metal such as copper as being green is problematic. This is not only because of the negative effects of mining on the environment, but also because only a small part of the demand for copper ends up in alternative energy uses.

According to a 2020 World Bank report, only 7% of global copper demand will go to renewable energy technologies and energy storage by 2050.

“Calling copper green, if it doesn’t have a net zero carbon footprint, or a really small carbon footprint, it’s very difficult to defend,” Dr Friedmann said.

In fact, many metals labeled as green, like nickel, could just as easily be labeled “dirty,” he said.

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The World Bank study said that many of the growing green energy technologies, such as wind, solar and battery storage plants, require significantly more minerals than fossil fuel plants during their construction phases. . This means that much more CO2 is emitted early in the life cycle of a green power plant. The good news is that once alternative energy power plants are actually up and running, their significantly lower carbon emissions, compared to coal or gas, quickly turn the tide.

“Even though low carbon technologies are more mineral intensive, they only represent a fraction (6%) of emissions generated by fossil fuel technologies,” the World Bank report says.

Electric cars, too, are not as green as you might think. For example, according to a recent report by investment bank Jefferies Group, the average electric car must travel 200,000 kilometers to produce lower “lifetime” total emissions than internal combustion cars. This is because electric vehicles are generally heavier than gasoline cars, requiring greater amounts of steel, aluminum and copper, as well as large amounts of lithium for their batteries.

The metals that have the most widespread green energy applications are cobalt, lithium and graphite, with demand expected to increase by over 460%, 490% and 495%, respectively, by 2050. However, the countries that dominate the production of metals used in low-carbon energy also have some of the worst environmental records.

China produces nearly 70% of the world’s natural graphite, while the DRC produces over 60% of the world’s cobalt. Not that long ago, parts of the DRC had no environmental standards on dust and diesel emissions, Rule said. The West African country also has hundreds of thousands of artisanal miners, many of whom operate illegally without environmental oversight.

While standards have improved dramatically in recent years in the DRC – and Mr Rule specifically mentions Ivanhoe Mines, whose new copper mine in the country has been built to Western standards – there is still a long way to go.

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“You will always have mining operations in emerging and totalitarian border countries that do not meet acceptable standards by any means,” he said.

Globally, the mining industry is making significant strides in improving its environmental footprint, often because investors demand it. Thermal coal businesses have become banned for some people investments, and companies fear more minerals will join the blacklist.

“The pressure is on them, and the pressure is coming from the investment community,” Mr. Pollitt said.

Thanks in large part to abundant hydropower, Canada is ahead of many countries when it comes to greener mining infrastructure. “The nickel and cobalt we export to the world are in the top decile for lowest greenhouse gas intensity,” said Pierre Gratton, CEO of the Mining Association of Canada .

“If you buy our nickel, it is more carbon-friendly than 90% of nickel in the rest of the world because it is processed in facilities powered by power plants that do not emit greenhouse gases. Ontario and Quebec for the most part. The same is true for the Quebec aluminum industry and certain copper mines in British Columbia.

Yet Canada has its black spots. A number of the country’s largest base metal mines, including Voisey’s Bay in Labrador and Raglan in northern Quebec, rely heavily on diesel generators for their electricity. Gratton hopes industry and government can work together to build new hydroelectric infrastructure that could eventually connect these mines to the grid.

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Meanwhile, at mine sites, electric transport trucks are expected to become more prevalent in the future, especially underground, Mr Gratton said, which will further reduce emissions.

Regardless of the progress made, some degree of negative environmental impact is inevitable in mining. But for those who protest the hardest against the damage done by the industry, Dr Friedmann said they would do well to look in the mirror.

“It’s silly for companies to try to rebrand themselves green when most of their products and operations are hard to categorize that way,” he said.

“But I think it’s just as silly for some environmental groups to paint these people as demons, when [environmentalists] drive in those electric vehicles that are built on their products. There is no lack of hypocrisy and stupidity in this discussion.

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