In order to remain competitive in an evolving market and maintain their social license into the future, mining companies need to find ways to operate efficiently and sustainably.
Mining companies see climate change as an operational risk predominantly due to water stress and floods that endanger their assets. In parallel, green house gas (GHG) emissions continue to accumulate, with emissions from the mining sector—including Scope 3—accounting for 28% of the global total.
With increased concerns for sustainability, accompanied by pressures from key stakeholders, there is a greater call for accelerated sustainability transformation and greater transparency from the mining industry. Net Zero mining is becoming the expectation, and global markets have created an imperative to decarbonize.
Recognizing growing climate-related risks and the profound impact on global emissions, investors are moving away from high-carbon assets as companies continue to invest in resilience zero-carbon solutions and low-risk technology opportunities to accelerate decarbonization.
Securing social license has become increasingly dependent on positive externalities to communities near mine sites. As reputational aspects become increasingly tangible, companies must take a socially responsible stance to compete with tech-heavy industrials for the best talent.
What Sustainability Challenges is the Mining Industry Facing Today?
First movers in the industry are targeting zero-carbon operations by 2030. However, many companies lack the expertise, technologies, and capital to transform at the necessary speed and scale to drive operational excellence and resilience in the global marketplace. According to ENGIE Impact's analysis of CDP reporting data, only 19% of mining companies reporting to CDP are on track to meet their sustainability goals. These companies face several challenges:
- Scope 3 and Supply Chain: Scope 3 emissions account for 95% of all GHG emissions within the mining industry. This means mining companies committed to sustainability can’t reach their goals without addressing suppliers, vendors and other third-party organizations they partner with.
- Mine-site Rehabilitation: Whether as part of the natural lifecycle of a mine or a proactive decision as part of an overall sustainability strategy, rehabilitating mine sites is challenging. Including climate-risk implications at the forefront of the rehabilitation strategy needs to be part of an organization’s broader Net Zero efforts.
- Effective Solutions Hierarchy: There are multiple resources and options in mining for implementing robust sustainability solutions, but those multiple options can also bring tough decisions around which to prioritize. Renewable energy, hydrogen, or offsets—for instance—can all play a role, but establishing the right balance and prioritization can be difficult.
What Should the Mining Industry be Thinking About?
Accelerated sustainability transformation is crucial for mining companies to remain competitive in the future. Operating in a dynamic market, these companies must leverage digital tools and technologies to optimize operations, clean energy supply, and extend decarbonization.
Transition Toward Decarbonized Operations: Decarbonization is a critical element of a mining companies' long-term strategy to maximize shareholder value. Strategic decarbonization driven by modern tools and technology is necessary to reduce emissions while fostering productivity. Companies must adopt a full decarbonization roadmap that includes suitable, innovative solutions, such as green mobility—which accelerates the transition to low-carbon mobility while optimizing fleets for the lowest total cost of ownership.
- Utilizing Data-Driven Analysis: It’s essential to use the right digital tools. With multi-objective optimization and relevant reference data, organizations can consider the existing infrastructure, the new energy demand profiles that need to be satisfied, and the list of technologies to consider. ENGIE Impact’s Prosumer, a multi-objective optimization tool, uses that framework to calculate the optimal investment strategy and energy assets for a predetermined project lifetime.
- Financing and Implementing Renewable Power: Strategic capital allocation plays a vital role in driving efficient global implementation. Companies are tasked with finding the most appropriate financing model for accelerated sustainability transformation. Success and reduced emissions rest on the seamless implementation of reliable power sources, including thermal solutions, on-site generation, storage, PPAs, VPPAs, offsets and more.
- Leveraging Big Data for Operational Resilience: Today, due to the declining cost and proliferation of technologies, companies can generate big data using advanced analytics and simulation tools that were not economically viable in the past. The resulting big data, when analyzed appropriately, enhances predictive maintenance, ultimately positioning companies to bolster productivity and secure long-term resilience.
- Accelerating Technology Transformation: Automation and digitalization drive targeted and efficient mining, facilitated by technological breakthroughs in areas such as in-situ leaching/block caving or biomining. Complimenting enhanced efficiency, companies reduce long-term operational costs by investing in technologies and R&D.
- Climate Risk in Mining: Mining is no stranger to harsh climates; but forecasts of hazards such as heavy precipitation, drought, and heat indicate these effects will get more frequent and intense, increasing the physical challenges to mining operations. Companies must identify, measure and respond to climate related risks and opportunities.