What role for mining and metals in a low-carbon economy?

31 October 2016

This week, the Paris Agreement, embraced as a game-changer by many stakeholders because of its unprecedented scale of ambition and truly global nature, will enter into force. National governments are now responsible for turning commitment into concrete action. Central to this is the need for them to maintain a clear and consistent path forward that facilitates leadership by the private sector.

However, the impact of the cumulative emission reduction targets put forward in countries’ Nationally Determined Commitments (NDCs) will, by the UNFCCC’s own admission, fail to meet the Paris Agreement’s stated goal of maintaining global temperatures below 2 degrees Celsius and, at best, will only achieve a 2.7 degrees Celsius rise by 2100.

This year’s Low-Carbon Economy Index (LCEI) identifies the scale of change and the cuts in greenhouse gas (GHG) emissions that we need to deliver collectively if we are to keep global temperature rises well below 2 degrees. Each year we fail to reduce GHG emissions at the rates necessary, the harder the task becomes.

As an energy intensive industry that also produces the minerals and metals necessary for a transition to a low-carbon economy, there are important implications for the mining sector. For mining there is the challenge of reducing its own emissions, whilst at the same time facilitating the transition to a low carbon economy.  This decoupling of growth from GHG emissions is a theme that is reflected in this year's LCEI.

One scenario from WWF of 100% renewables by 2050 corresponds to a 5-18% annual global production increase of metals over the next 40 years. Mining clearly has an important role to play. For example, copper is fundamental to increased electrification and smarter grids and cities, and low carbon technologies such as wind turbines require 3-4 times as much copper as conventional fossil fuel sources to deliver the same amount of electricity. Chile's mining industry is responsible for a third of global copper output, and its electricity consumption – which accounts for a quarter of the mining costs - is expected to double by 2025. Chile itself has responded to this with ambitious renewable energy targets. Mining companies will need to do their bit and there are already some good examples. CAP the iron company has enabled the development of a 100MW solar PV plant with a power purchase agreement, and Antofagasta is developing a combination of wind, solar and hydro generation to supply 80% of the power for its biggest mine, Los Pelambres by 2019.

Collaborative approaches to accelerate the use of low-emission technologies are also key. For example, ICMM member Norsk Hydro, is building a new pilot facility at its existing plant in Karmøy to develop the world's most energy and climate efficient technology for producing aluminium. This is in line with the company’s commitment to be carbon neutral by 2020.

ICMM’s ambition is to facilitate the mining industry’s contribution to sustainable development. We will continue to highlight practical examples of how mining can contribute to the transition to a low-carbon economy so these examples can be replicated not just in Chile or Canada, but in all countries and all sectors.

To read more about our ambition in this area, please visit our website or get in touch with me directly.

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Tom Butler | CEO, International Council on Mining and Metals

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