The climate movement needs to engage with Big Mining as never before
Environmental activists need to ramp up engagement and collaboration with the mining industry if the energy transition is to be secured, however uncomfortable it makes them, argues Daniel Litvin. Informed by his work advising resource companies on sustainability and geopolitical issues, he highlights five points to encourage a constructive conversation.
In the minds of some activists, the sins of Big Mining almost equate to those of Big Oil: environmental destruction, overconsumption of natural resources, neglect of human rights, excessive corporate power. Mining executives, in turn, are incensed at what they see as their demonisation. They view themselves as producing materials essential for modern society – and responsibly, to boot.
These conflicting narratives around mining have been around for many decades. But now, more than ever, the two sides need to engage. Activists must keep up the pressure on mining companies to behave responsibly. But a big-picture, more collaborative mindset is also needed from all parties to help support the acceleration of mining the world now needs, alongside a focus on upholding environmental and social standards.
Five pointers for activists
In advising mining companies on their sustainability and geopolitical strategies, I have long sought to straddle the industry–activist divide. Informed by this, here I provide a basic set of pointers for activists as they engage with the topic and potentially the ‘Big Miners’ themselves.
1. The energy transition will require vast amounts of additional mineral extraction
Renewable energy systems require more far minerals to construct than their fossil fuel equivalents. Building an electric vehicle (EV), for example, requires some six times the mineral inputs of an internal combustion engine car. Likewise, constructing a wind farm requires far more metals per megawatt of installed capacity than a gas-fired power plant.
According to the International Energy Agency (IEA), the world will require an estimated six times more mineral inputs in 2040 than today if we are to achieve net zero globally by 2050. Demand is expected to soar for lithium, graphite, cobalt and nickel among other minerals. As for copper, the need to further electrify energy systems helps explain why by 2050 global demand is expected to exceed on an annual basis all the copper consumed in world from 1900 to today.
All this means far more mining. According to Benchmark Mineral Intelligence, well over 300 new mines need to be built over the next decade alone to keep up with demand for EV and energy storage batteries, requiring trillions of dollars of investment.
Could recycled metals play much of a part? Unfortunately, it will be many years before big quantities of many of the required metals become available for recycling (most EV batteries are far from reaching the end of their first life). There are cost and technology barriers to overcome, too. The IEA estimates that, by 2040, recycled copper, lithium, nickel and cobalt from spent batteries could reduce demand for fresh extraction of these minerals by some 10% – good, but clearly not enough to save the day. A World Bank analysis in 2020 came to similar conclusions.
2. Global climate progress risks being held up by weak supplies and high prices of these minerals
In theory, an expected shortage of any of these so-called ‘critical minerals’ would push up prices, swiftly encouraging more mine production in order to meet the demand. But opening up big new mines is far from a smooth process in reality. Until recently, big miners have been hesitant to invest, having lost billions in previous decades from over-investing in new production.
But the biggest challenge here is the time lag and risks involved in developing new projects. It typically takes 10 to 20 years or more from discovering a viable mineral resource to first production. Importantly, the process is often slowed or even halted by a combination of ‘not in my backyard’ activism, opposition by indigenous and environmental groups, and drawn-out planning processes. In recent years, countless proposed new mines for critical minerals – for example, in the US, Peru, Portugal, and Serbia – have been blocked or delayed as a result of such resistance.
Anti-mining opposition often draws from genuine concerns and grievances at a local level – see point four below. Even so (and this is an awkward fact from an environmental perspective), the net global effect is to inhibit the ability of the industry to ramp up production swiftly when needed. As a result, critical mineral supplies sometimes may be available only at cripplingly-high prices, slowing the roll-out of much-needed clean energy infrastructure.
3. Geopolitical dangers add to the urgency of boosting mineral supplies for the energy transition
China dominates global processing and refining capacity of many critical minerals and electric battery production, and also controls a growing share of the source mines for critical minerals. If tensions continue to mount between China and the West, there is a clear risk that Western firms such as EV manufacturers and renewables developers will find it difficult to source raw materials and components from Chinese suppliers, as they have in the past. Russia has ‘weaponised’ its supplies of gas to Europe to scary effect over the last year. The fear among many security analysts is that China at some point could use its dominance of critical mineral supply chains to land blows of its own against the West (were conflict to erupt over Taiwan, say).
The obvious solution here is to accelerate the development of critical minerals and a clean energy supply chain closer to home, either in Western countries or Western-friendly regions. Certainly, that thinking has influenced a number of recent government initiatives in this area, from the ‘Inflation Reduction Act’ in the US to the UK government’s ‘Critical Minerals Strategy’. But local resistance to new mines and industrial facilities remains a key obstacle – and no Western government has yet set out a credible path to navigating through that.
4. Local environmental and social impacts of mining continue to require urgent attention
No one, not even the Big Miners themselves, is suggesting that the industry be given a free pass to ramp up production quickly. True, some parts of the industry have significantly improved their environmental and social performance in recent decades. Many firms have tightened their environmental management systems, reducing contamination of local land and water. Tackling carbon emission from mining operations has become a new focus. Miners have generally got better at listening to local communities. The Big Miners in particular support a range of initiatives to help raise industry standards, from the International Council on Mining and Metals to the Extractive Industries Transparency Initiative.
But major problems clearly persist. A number of Big Miners with seemingly strong sustainability policies have committed major transgressions in recent years, both environmental and social (largely because their policies were insufficiently backed up by internal systems of control and governance). The industry continues to grapple with deep-rooted challenges – for example, how to operate in corrupt environments with integrity, how to generate lasting local economic benefits and help host countries avoid the so-called ‘resource curse’, and how to coexist with and improve safety for artisanal miners who often work in dangerous conditions alongside industrial operations. Meanwhile, smaller companies and also many non-Western firms are subject to far less external scrutiny than the Big Miners – and some undoubtedly take advantage of operating in the shadows in this way.
Across the board, in short, the role of activists, working alongside local communities, in holding mining companies to account remains indispensable.
5. Simplistic activism risks creating perverse consequences and slowing progress
Here lies the rub. Much environmental activism around mining is framed in terms of opposing mining operations and new projects, rather than accelerating the right sort of mining. The latter looks likely to be essential to achieving global climate targets, but opposition is often across the board.
Another common focus of activism is weaker environmental and social standards of mining in poorer parts of the world. Growing attention is currently focused on the miserable conditions under which artisanal miners extract cobalt in the Democratic Republic of the Congo (DRC), for example.
But the risk here is that such campaigns unintentionally encourage industrial miners and also industrial buyers of commodities who are concerned about their global reputations simply to shift their capital spending and supply chains to richer countries rather than stepping up their efforts to raise standards locally. As a result, countries like DRC may struggle even more to attract the investment they want, and artisanal miners may see their already-meagre livelihoods at risk. Those international investors that stay generally will be those less sensitive about their global reputations.
Already, key global critical mineral deposits, including the DRC’s rich cobalt reserves and Indonesia’s nickel, are in large part controlled by Chinese firms, some of whom have come under fire over their environmental standards. Admittedly, this Chinese dominance has more to do with Chinese companies’ surging international ambitions in recent years than with the deterring effect of NGO scrutiny on Western investment. But it would be a tragic own-goal if NGO campaigns helped to entrench this situation of weak local standards, just as it would be if such activism helped block mineral supplies key to the energy transition on a global level.
A new generation of environmental activism around mining is needed
Adopting a big-picture mindset, the focus should be on raising standards in a way that encourages more investment of the right sort. Elsewhere I have argued that a new ‘grand bargain’ needs to be struck between the mining industry and activists in which miners significantly step up their environmental performance and their contributions to local economies and in return activists support swifter consent processes for genuinely responsible projects. That may be a difficult deal to pull off on a global scale. But without doubt a much more collaborative mindset is needed on both sides – with enlightened activists working closely with enlightened miners – as a key plank of global climate action in the years ahead.
The Grantham Research Institute recently began a major new research project on ‘critical minerals’. The project will be taking a detailed look into demand and supply dynamics and broader risks associated with such minerals. Contact Simon Dikau for more information.
The views in this commentary are those of the author and do not necessarily represent those of the Grantham Research Institute.