In 2021, Amazon-backed Rivian became the sixth most valuable car company as it hit a valuation of more
than $120 billion on its U.S. debut. While this feat is worth celebrating, there is a great need to address the strain on the minerals ecosystem. Also, blind spots are abundant among stakeholders because they lack a complete view of the entire minerals ecosystem.
As a result, miners will face a world of contention as they pursue responsibly sourced materials, creating a dual challenge: how to produce the volume of minerals necessary for decarbonization and electrification, and how to produce the volume of minerals with ESG requirements in mind.
A primary example of this tension is copper. The energy and water intensity of current processes, coupled with current miners’ capital discipline and the challenges presented by the 15- to 20-year permitting and development cycles, makes the feat to mine millions of tons of copper highly unlikely. The most alarming consideration is the upstream impact is likely to wipe out any downstream gains if miners continue to apply current methods for extraction and processing.
One impediment is mining’s persistent underinvestment in innovation. This innovation deficit creates instability in the industry as the world shifts its energy systems from being fuel-intensive to materials-intensive. The good news is a growing awareness exists about the inadequate supply of key minerals to satisfy the rapid demand for transport electrification and the growth of renewable energy. To overcome the contention within the minerals ecosystem, the mining industry cannot forge it alone; the magnitude of these complex challenges is beyond any single company or industry.
In order for miners to strike a sweet spot at the intersection of ESG and the energy transition, they have to tackle two challenges. First, miners must address an innovation challenge to shift from miners to materials providers. Second, miners must address an engagement challenge, expanding the universe of inputs by taking a multi-sector, multi-stakeholder approach to increase understanding and collaboration.
Read Peter’s full paper, published in the proceedings of the 26th World Mining Congress.
