Miners must look to their supply chains for a true energy transition

Mined materials are integral to much of the technology at the heart of global efforts to curb emissions and demand for metals and minerals is set to soar, but equally it is vital that the metals and mining industry reduces its carbon footprint.

Direct emissions (scope 1 and 2) from the metals and mining sector account for around 12 per cent of global CO2 emissions. More than 75 per cent of the sector’s emissions come from Africa, Asia and the Middle East.

As climate change awareness grows, mine owners and operators are adopting a more transparent approach to the sustainability of their operations. Mining majors are announcing net-zero commitments and sustainability studies are being commissioned to identify the source of mining emissions as well as find ways to reduce them throughout their supply chain.

New clean-tech solutions include on-site renewables, data-driven smart mines and hydrogen-powered or electric vehicles, among many other changes. As miners look to source cleaner electricity supplies, a migration away from buying coal-fired power to more carbon-friendly power sources is also underway.

But some emissions are beyond a miner’s direct control. Indirect emissions from hard-to-abate processes like steelmaking account for around 85 per cent of emissions from the metals and mining sector.

Energy transition opportunities

While China has invested heavily in its burgeoning renewables sector, it remains the world’s biggest steel producer and the mining industry’s main greenhouse gas contributor. For global emissions to fall, steelmaking and other heavy industries in countries like China must adopt innovations such as carbon capture utilisation and storage (CCUS) technologies, which prevent CO2 reaching the atmosphere.

Climate scientists, policymakers and industry agree about the urgent need to adopt CCUS, but there is a way to go before the business case is fully realised.

The financial community has an instrumental role to play in moving carbon-intensive sectors like mining and steelmaking towards more sustainable practices, and helping clients explore energy transition opportunities.

As the change gathers pace, investors will increasingly be drawn to mining and metals assets that play a pivotal role in the energy transition. But the countries and sectors most in need of financing to adopt low-carbon business models often have least access to green finance.

A roadmap to net zero

Standard Chartered is supporting the metals and mining sector in the transition to clean energy across a range of activities, including reshaping mining portfolios, investing in commodities that are essential for the growth of green power, decarbonising operations and removing carbon emissions.

Our team includes mining-industry experts who work with metals and mining clients in both the developed and developing world to help determine their individual sustainability goals and create a roadmap to minimise waste, water, energy and emissions.

We understand that facilitating a successful transition rests on building relationships, acting with urgency and adopting a collaborative approach to achieving low-carbon change.

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