The future is circular, so what is the future of mining?

By Rusty Langdon, Senior Research Consultant, Institute for Sustainable Futures, University of Technology Sydney

In the next 15 years, we will experience one of the biggest overhauls to our global energy system since industrialisation. A transition towards renewable technologies and away from fossil fuels is essential to ensure that global warming is kept well below two degrees Celsius, but the energy transition will demand a huge amount of minerals.  

The International Energy Agency anticipates that if we want to meet net zero targets, more than 40 million tonnes of minerals will flow into technologies like solar panels, wind turbines and other renewable technologies in 2040. Batteries for energy storage systems (BESS) and electric vehicles (EVs) will dominate demand at 21.5 million tonnes. Key transition minerals in high demand include lithium, cobalt, nickel, manganese and graphite. The global economy will also see increased demand for rare earths like neodymium, praseodymium, dysprosium and terbium.

An increase in mineral demand of this magnitude will result in a rapid increase in global production, which could translate to export growth for Australia as a large producer of all battery minerals. Experts currently modelling mineral supply and demand scenarios propose that with the availability of global mineral deposits – excluding sites of environmental significance – future demand growth can easily be met; however, if we want to consider ecological and social limits holistically, then the equation isn’t so cut and dry. Almost all mineral supply is currently from mining; but, with circularity increasing in popularity, rapid shifts in technology and slowing rates of population growth, we may see a real reduction in demand for mined minerals by 2050.

Alternatives to mining

The European Union has signalled a strong preference for secondary (recycled) battery materials over mined minerals, regulating that 50 per cent of materials sourced for lithium battery production must come from recycled content by 2027, and 80 per cent by the end of 2030. Several other circularity and net zero trends may also result in reduced demand, including incentivised adoption of smaller EVs and electric micromobility over larger vehicles, a greater share of the population utilising public transport, re-using EV batteries in secondary applications such as BESS, and sharing platforms that reduce the need for individuals to own lots of ‘stuff’.

As Australian landfills start to fill with the mountain of waste we produce each year, emphasis is being placed on doing more with what we have. Batteries, in particular, have come under scrutiny as a hazardous waste material, proving to be challenging at the end of life from both an environmental and safety perspective. The introduction of the Battery Stewardship Council’s B-cycle scheme will no doubt result in an increase in secondary material recovery in Australia, with the potential of new production capacity; however, with the scale of secondary material unlikely to offset demand for mining for at least another decade, a concerted effort to reduce the negative impacts of current production will be required in the meantime.

Responsible mining

Responsible sourcing is one avenue for reducing negative mining impacts, and describes a focus on environmental, social and governance (ESG) criteria during production, and through appropriate planning, management, and control actions. The challenge is that there are a plethora of voluntary ESG management and reporting mechanisms available to Australian mineral producers; but with no clear preference yet adopted by industry, the voluntary ESG disclosure landscape can be described as complex and overwhelming.

Historically, Australia has demonstrated, at least on paper, what sustainable mining might encompass, with best practice guidebooks developed for the sector in 2011. Despite this, there have been considerable changes in global expectations, and new material issues of importance have emerged since 2011. In the absence of renewed guidance, Australia is at risk of not being able to demonstrate responsible production. So, if Australia did try to reach for a high bar in terms of responsible sourcing, what would that look like?

The Initiative for Responsible Mining Assurance is positioned internationally as a highly rigorous voluntary assurance standard; however, industry advocates, such as the Minerals Council of Australia, are presenting the Towards Sustainable Mining standard as the industry benchmark. Australian regulation also plays a role in assuring that industry is adhering to good environmental and social practices. Still, no one voluntary ESG standard or regulation covers all material issues of importance; and regardless of which ESG reporting and management mechanism is adopted by Australian minerals producers moving forward, there are key issues emerging on the horizon that should be front of mind:

the impacts of mining on water supply and quality, particularly in the context of water-stressed regions and variability in water availability due to climate change

free, prior and informed consent from First Nations communities, and collaborative initiatives that contribute to ESG outcomes for impacted First Nations communities that extend beyond mine lifetimes

integrating climate change considerations into mine site engineering, especially in relation to tailings dams

progressive rehabilitation of mine sites and comprehensive mine closure planning – a ‘leave no trace’ mentality to doing business

circular practices that reduce dependence on raw minerals and make the most of what is being extracted – both through production efficiencies and through collaboration with end-product recyclers

mine site electrification.

Future outlook

New and existing mines are under pressure from original equipment manufacturers, downstream material purchasers, civil society organisations and responsible consumers globally to demonstrate adherence to a wide range of ESG criteria, reporting standards, and certifications. Increasingly, sophisticated mechanisms and technologies are also being developed to aid in the comparison of minerals being purchased, like traceability platforms and product passports.

Traceability platforms are already being used by diamond traders for the purpose of provenance screening. Similar efforts are underway in the battery sector, with the Global Battery Alliance’s Battery Passport. It is intended that ESG information will underpin market decisions within these platforms – the Battery Passport has already developed reporting rulebooks on child labour, human rights and greenhouse gas emissions. It is unclear whether market decisions will move towards price premiums for good actors, or negative screening for bad actors. Accordingly, Australian battery minerals producers must keep abreast of the rapidly changing expectations of the global market in relation to responsible sourcing, and be prepared to demonstrate a responsible product.

Australian battery mineral producers are already grappling with a shifting ESG landscape, and change won’t happen overnight. Honesty, integrity and transparency are integral to credibility, which is a valuable currency in a world that has been awash in corporate green marketing for too long. It is also important that any efforts to streamline ESG management and reporting don’t favour simplicity at the expense of real positive outcomes for the environment and society.

The importance of getting this right from the outset cannot be understated, and any delays in the supply of transition minerals will reduce our ability to meet net zero goals. Instances of business-as-usual practices where communities have not been appropriately consulted have resulted in real project delays, and, in some cases, proposed mines have been abandoned altogether – as was the case with Rio Tinto’s abandoned battery materials project in the Western Australian Jarrah Forest. Proposed projects that don’t adequately consider the ESG impacts not only impact the confidence of investors and consumers in the industry, but they also increase the costs of production and burden efforts towards economic efficiency. Under the microscope of international market scrutiny, Australia cannot continue to risk our good ESG reputation.

Australian mineral producers have the potential to emerge as global environmental leaders, paving the way to a responsible future, and leave the planet in better shape so that future generations will have something worth inheriting. 

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