The global energy and transport systems are undergoing significant transformations, comparable to the changes seen during industrialization. Projections indicate that renewable energy generation will match the combined output of fossil fuels and nuclear energy by 2026. However, the shift towards renewable energy sources necessitates the extraction of a wide range of minerals known as “transition minerals.” These minerals, including lithium, cobalt, copper, graphite, magnesium, nickel, and rare earths like neodymium, praseodymium, dysprosium, and terbium, will play a crucial role in building wind and solar farms, batteries, and electricity networks. The International Energy Agency estimates that demand for these minerals will increase sixfold by 2040 to meet climate targets. To put this into perspective, it is estimated that electric vehicles and battery storage alone will require 21.5 million tons of transition minerals. Currently, mining provides the majority of the global supply, and the surge in demand could lead to the establishment of nearly 400 new mines by 2035.
Responsible Sourcing for a Sustainable Future
As Australia hosts the World Mining Congress, the responsible sourcing of minerals needed for the energy transition becomes a critical issue for the industry. While the demand for transition minerals continues to grow, it is essential to ensure that their extraction is carried out responsibly. Several strategies can be implemented to minimize mineral demand and reduce the need for new mines. These strategies include reducing dependence on cars, improving energy efficiency, and transitioning to a circular economy that prioritizes reuse and recycling. Recycling, in particular, can significantly reduce the demand for mined materials. By 2040, it is estimated that recycling could decrease the demand for lithium by 25%, cobalt and nickel by 35%, and copper by 55%. However, the impact of recycling will only be significant from 2035 when large volumes of lithium-ion batteries reach the end of their lifespan.
To achieve responsible sourcing, it is crucial to address environmental, social, and governance impacts and risks associated with mining operations. Key concerns include the use of child and forced labor, environmental damage, impacts on Indigenous rights and cultural heritage, and corruption. The Australian government released guidance on sustainable mining in 2011, but recent incidents, such as the destruction of a 46,000-year-old Aboriginal heritage site by Rio Tinto in 2020, highlight the need for a fresh look at mining practices. Indigenous communities worldwide are advocating for free, prior, and informed consent when mining and renewable energy projects are proposed on their land. This approach acknowledges their right to be consulted, informed, and supported in decision-making processes, including the right to say no.
To ensure responsible sourcing, mining activities must comply with a set of sustainability criteria. However, there is currently no common approach to measuring, managing, and reporting environmental, social, and governance performance. The multitude of voluntary standards and certifications available to battery materials producers complicates matters, especially for smaller mining companies. An agreed-upon standard and common language for reporting and management are necessary to enable traceability solutions, such as the Global Battery Alliance’s blockchain-enabled “battery passport,” to produce trustworthy and comparable results. The Initiative for Responsible Mining Assurance (IRMA) is recognized as one of the more rigorous standards due to its governance structure involving mining companies, purchasers, NGOs, affected communities, labor organizations, and the finance sector.
Moving forward, it is essential to address several issues to ensure responsible mining practices. The Australian Critical Minerals Strategy, released recently, emphasizes the importance of environmental, social, and governance practices. Mining impacts on water supply, the need for free, prior, and informed consent from First Nations communities, integrated planning for climate change impacts, biodiversity protection, mine closure planning that includes progressive rehabilitation of ecosystems, and circular business practices should be at the forefront of regulatory reform. As a leading mining nation, Australia has the opportunity to leverage its historical environmental leadership, demonstrate renewed responsibility and integrity, and set an example for other countries. By doing so, Australia can contribute to leaving a planet that future generations can be proud to inherit.
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