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An increasing focus on clean energy is driving up demand for minerals and metals needed for its production. Yet, mining itself can be done in ways that harm the environment, harm communities and even contribute to global warming. Policies can ensure it doesn’t do so. This podcast discusses how.
This podcast series is produced by Fernando Di Laudo and Jonathan Davidar.
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Transcript
Roumeen Islam: This is the World Bank's Infrastructure podcast. In this episode, we discuss how to mine sustainably for minerals and metals, many of which are needed in the clean energy transition. And don't forget to listen to the summary at the end of the podcast.
I was driving my new electric car, proud to be green and emissions free, but then I started thinking of what it took to make that car, the minerals coming from all over the world to make the batteries and electric motor that were powering me along. Countries around the world, supply these. For example, the Democratic Republic of the Congo has cobalt, which has become a critical mineral for its own economy and worldwide for powering batteries that will store energy from renewables.
Chile is an important producer of lithium, a key component for batteries. And recently Chile is improving the way it was managing its lithium mining in order to limit the impact on its water resources. In order to mine sustainably, countries around the world can mitigate the climate and environmental effects of mining to make the green revolution truly green. Let's find out how.
Good morning and welcome. I am Roumeen Islam, your host for Tell Me How. And today I have with me, Christopher Sheldon and Daniele La Porta, experts in mining, who will tell us about climate-smart mining of minerals and metals to support renewable energy growth. Welcome to the two of you.
Christopher Sheldon: Thank you, Roumeen. It's a real pleasure to be with you today. Thank you for having us.
Daniele La Porta: Thanks so much. Remain looking forward to it.
Roumeen Islam: Thank you both. So, Daniele and Christopher, when did you first begin studying this issue and why has it become increasingly important?
Daniele La Porta: So, we began looking at this topic about four years ago as there was a real growing interest in understanding the impacts of the global energy transition on minerals and metals. So, it turns out that the new low carbon energy technologies are indeed very mineral intensive.
Christopher Sheldon: And to answer the second part. Why is it becoming so important today? There are two distinct aspects to this acceleration. Firstly, the rapidly falling cost in deploying these low carbon technologies we're including wind and solar, but especially batteries. And secondly, the public policies and international commitments to decarbonize the energy systems, they've really expanded. There is this is growing consensus that the climate agenda should be at the forefront of the recovery.
Roumeen Islam: There is definitely an emerging consensus that the climate agenda needs attention that we need to accelerate toward renewable energy production.
So, increasing demand for the minerals and metals critical for this energy transition. I guess this will be very good for developing countries that can export these minerals as they will benefit from higher prices and revenues, won't they?
Christopher Sheldon: Oh, yes, absolutely. We believe so there's a lot of promise for growth that can come from that, but there's also a few challenges.
So firstly, you've got to know what endowments the country has so that it can really estimate that value and attract the investment in. Secondly, ensuring that the revenues from money — that they're going to be used to really benefit the citizens of the country more broadly. And thirdly, managing the climate, environmental, and the social consequences of increased money activities. And that's a lot of the focus of what we're talking about today.
Roumeen Islam: Yes, to be sure managing natural resources well and sustainably: that's not a simple matter at all. And we're going to get more into that later in the podcast, but maybe we can first clarify what are the low carbon technologies that we're going to be talking about here because there are several such technologies. Daniella, would you like to take that?
Daniele La Porta: Sure, yes, there are several, and our research initially focused on three specific energy technologies: wind solar, and batteries as these three are currently the main providers of renewable energy globally, but there are other technologies and we are looking at those right now as well. For example, low carbon hydrogen, which has become increasingly important, geothermal, and nuclear.
Roumeen Islam: Yes, these three technologies are indeed the most prevalent and their costs are also falling quite dramatically. So, it's a good idea to be studying these. But for these three main technologies, what are the minerals and metals that are the most important?
Daniele La Porta: So, our research focused on 17 minerals and metals for which demand may rise. If you look at some of them such as copper nickel, molybdenum, and aluminum; they play an important role across a wide range of renewable energy technologies while others are indeed needed to supply specific technologies.
For example, a wind turbine requires significant amounts of neodymium while solar panels require indium and silver. But the real jump in demand is really related to batteries. Energy storage is the one generating the most mineral demand growth for minerals, such as lead lithium cobalt, graphite, and zinc.
Roumeen Islam: So, you mentioned several minerals there, some of which, I'm very familiar with, from my chemistry classes long ago, but there are some that, I've never heard of and I still have problems saying properly. I think Daniela, you mentioned neodymium, right?
Daniele La Porta: Yes.
Roumeen Islam: All right. So, I understand that storage is key given the fluctuations in wind and solar production. But what kind of increase in demand do you foresee for these minerals and metals? And what assumptions are you making about renewables expansion?
Daniele La Porta: In order to do our research, we had to use several assumptions and we used three climate change scenarios. Business as usual, which implies keeping global warming at or below 3.5 degrees Celsius; then, there's the two degrees Celsius; and then the very ambitious target of 1.5 degrees Celsius. We found that demand for minerals, such as graphite, lithium, and cobalt could increase by up to 500 percent by 2050 if we want to keep global warming at or below two degrees Celsius.
Just to give you an idea, we will need 3 billion tons of minerals and metals, as well as energy storage. That's quite a significant number and it's very hard to even imagine what it means, but it's equivalent to about 300,000 Eiffel Towers.
Roumeen Islam: 300,000 Eiffel Towers. That's really very hard to imagine now, how did you estimate that? Did you do that Danielle?
Daniele La Porta: It was a team, but yes, we did that. Numbers.
Roumeen Islam: Good imagery. All right. So, I understand that these minerals and metals are not liberally sprinkled around the globe. So, who actually mines them and who exports them? Christopher, would you like to take this one?
Christopher Sheldon: Yeah, sure. Actually, minerals are fairly widespread, but there's usually a handful of countries that account for most of the supplies of each of these particular minerals and metals. China and Australia are very big exporters. But a lot of developing countries of South Africa, very strong position in the market for platinum which goes into fuel cells. Guinea has got the world's largest reserves of high-quality books site that you need for producing aluminum. In the case of lithium, for example, this lithium triangle of countries in south America, Chile, Argentina, and Bolivia, they enjoy an extremely strong market position in lithium. Chile and Brazil, they stand to gain from increases in the demand for copper and iron, all respectively. Indonesia, Philippines: they could really stand to benefit a lot from the increased demand for nickel for batteries.
Roumeen Islam: So, Christopher is the lithium triangle, anything like the Bermuda triangle.
Christopher Sheldon: I think it's a bit safer and you might actually come out of it a bit richer.
Roumeen Islam: Oh, that's good to know. So, I understand that there are initiatives exploring energy storage in different forms, such as heat or more pumped hydro, and that's certainly going to affect demand for battery storage. So how do you expect technology to affect markets in the next few years?
Daniele La Porta: I think it's safe to say that the 17 or so metals that we looked at in our analysis will rise in demand and price. So, there are those minerals such as copper, which are needed for all the clean energy technologies. And so, we expect that commodity to do well. So other minerals are more dependent on discrete clean energy technologies, or even sub technologies.
For example, look at the batteries space. There is a lot of innovation happening there. And there are currently six major kinds of lithium ion batteries being produced for electric vehicles. Each of those has a different mineral composition. So, it's a bit too early to say which EV battery type will win which complicates predictions on the expected demand for these minerals.
Roumeen Islam: Yes. I'm sure there are many like me who don't even know that there are six different battery types going into electric vehicles. Thank you for that. These predictions I think are very difficult with technology changing so very fast, but can we talk a bit about recycling and its impact on supply. Would just recycling be sufficient to meet increasing demand? And is there any recycling now who recycles?
Daniele La Porta: That's a great question, Roumeen, because recycling and reuse of minerals will become more important in meeting the growing mineral demand. Recycling of some of these critical minerals, it's still at very early stages, but aluminum and copper, for example. The recycling of these minerals is already happening at fairly high rates, especially in OECD countries, but also growing in major developing countries, including China and India. But I think it's very important to emphasize that even if we scale up recycling rates for minerals like copper and aluminum, by a hundred percent recycling and reuse would still not be enough to meet the demand for renewable energy.
Roumeen Islam: Okay, that's important to know. Why don't we move on to the environmental climate impacts of mining for minerals and metals? What are these? Daniele would you like to take this first?
Daniele La Porta: Sure. So, the environmental impacts are both global in the form of greenhouse gas emissions and also local in the form of water quality and quantity and impacts on local forestry and biodiversity. Of course, this additional mining that needs to happen means you also have significant more waste, but I think it's very important to note that any increase in the greenhouse gas emissions due to the growing demand for these minerals would be of a magnitude much smaller than if we were to continue to use fossil fuels for electricity on a business as usual basis.
Roumeen Islam: Absolutely. Otherwise, there'd be no point in going for renewables, would there? Could you expand on the local environmental impacts a bit, Daniele?
Daniele La Porta: Locally the environmental impacts of this increased extraction and processing of the climate action minerals, as we called them, it varies. But for example, with copper being extracted at concentration levels of under 1percent, and because of the waste impacts are large. Just to explain in simple terms one doesn't just find lumps of copper lying around. The copper is mixed within the rock. So, to extract the copper, you need to break up that rock. Then put the whole thing in a big tank of solvent and the chemical process will then separate the copper and it will rise to the top. But once that copper is separated, the rest is waste.
Roumeen Islam: So sorry to interrupt, you said that copper, if it's at concentration levels of under 1 percent, then it creates a lot of waste. Is that normally how it's found? Is it normally at such low concentration levels that you find it?
Christopher Sheldon: These days it is, and increasingly smaller and smaller concentrations as the resources have been developed which means as we need more of it, the likelihood is that we'll find grades that are lower, which needs more money and more waste to get the same amount of copper that we need today. So, you can see here more than nine, 99 percent is waste under normal circumstances, but they could even get lower.
Daniele La Porta: And also, if we take lithium, for example, particularly brining, it requires enormous amounts of water, which unless, very carefully managed, could reduce water for use by communities, for example.
Roumeen Islam: But what is brining? Sorry, Daniele, before we move on?
Daniele La Porta: Brining is the process where lithium is usually found as a salt diluted into water, groundwater. So, you need to pump that groundwater out of the ground, and then you have to let the water evaporate. So, then you can concentrate the lithium. So just to give you an idea, in 2019 water use from lithium brine production alone was equivalent to almost 50,000 Olympic sized pools. It's even hard to imagine how much water that is. It's really due to these and other environmental impacts that we need to do mining in a climate-smart mining way so we can better manage the impacts.
Roumeen Islam: Okay. You're really throwing out some very large numbers there - 50,000 Olympic size pools, 300,000 Eiffel towers. I think we should get down to doing climate-smart mining straight away. So how does one go about doing it?
Christopher Sheldon: We agree with you. First of all, we want to start with a structured way of looking at the issues in a particular country. So, we develop that structure. Climate-smart mining's organized along four key themes: climate mitigation, climate adaptation, reducing material impacts, and lastly, the market opportunities. So, the first three themes, they're really identifying specific actions to mitigate climate and material footprints from mining extraction, but right through to end use. And the market opportunities theme, that really focuses on how we can help developing countries make the most of the opportunity that's coming from the demand, the growing demand for these minerals. And also, we look at things like carbon trading and how that can be used to help support this.
Roumeen Islam: So, the fourth theme is a bit different from the first three. So, should we go into more detail on the first three themes of climate-smart mining?
Christopher Sheldon: Sure. Daniele, do you want to take those, and I can take the last one?
Daniele La Porta: I'll be happy to take the first three. So, to give you an example of a few interventions that minimize the climate and the material footprint of mining along these supply chains one obvious one is using clean energy and mining operations. We really need to keep in mind that the mining sector alone accounts for up to 11% of global energy use in mining operations in remote areas are often rely on diesel or coal for energy.
And even beyond mineral extraction and processing, we need to look at the whole supply chain to identify direct and indirect emissions to see where these greenhouse gas emission reductions can happen and where policies are needed to incentivize this. An example: using aluminum to produce solar PVS is a good example. Preventing deforestation from mining and its infrastructure is also very important and key to being climate-smart. Christopher, would you like to add to that?
Christopher Sheldon: Just to pick up on these indirect emissions. Because the mining companies, they need to work not only on their own business, but also with the other industries and all the steps along the supply chain to ensure that they also adopt zero emission technologies as well. So, it's really got to be a joint effort.
Roumeen Islam: Yeah, I think that makes it really quite complicated. Trying to coordinate everybody's emissions. It's a big effort. Where does climate adaptation come into this? Does mining then create problems that countries need adaptation policies for?
Daniele La Porta: Yes, mining can exacerbate the vulnerabilities that a changing climate already brings. Poor land use planning can really exacerbate climate impacts and stress ecosystems that are already very stressed, and governments needs to be involved and set the rules to mitigate these impacts. This stress can ultimately affect the sustainable livelihoods of local communities.
Roumeen Islam: I see. Maybe you could mention a couple of ways that one can reduce the material impacts of mining. So, we've spoken about mitigation and adaptation. Let's go into the third theme.
Daniele La Porta: On the material impacts one example is water resources and how that additional mining will impact it. Water recycling is very important. Mining projects need to reuse water to reduce their water consumption. Waste management is also key. But thanks to technology, a lot of improvements are already happening.
Roumeen Islam: I'm assuming there's really quite a lot of demand for new technologies that can help you manage waste. We were just talking about the huge waste that comes along with copper mining and there are so many potential side effects that I understand much better. Now the management challenges must be related to adopting policies and procedures to support these mitigation adaptation efforts amongst other things, is that the case?
Christopher Sheldon: Indeed, they are. And the different aspects of management, they have to be all considered together. And one thing is very important as the demand for the minerals really takes off and the countries, they really need to manage their revenues. They're exchanging essentially an asset in the ground, a natural asset for cash, for a financial asset, but eventually those resources are going to run out. Now the first step in managing an asset of course, is knowing how much you have. And a lot of lower-income countries, they simply don't know. They just don't have the geological data. So, what we do is to fund the initial exploration phase for these countries to help gather data with airborne geophysics, understand it, interpret that data so that they can identify these resources. We're providing tens of millions of dollars for this through World Bank financing, but also to develop capacity of these countries to help them identify and value their climate action mineral endowments. So, for developing countries, particularly in Africa, there's a huge wealth of geological knowledge to be obtained and they can really benefit a lot from this.
Roumeen Islam: What I didn't understand is why countries need World Bank involvement in this endeavor. Wouldn't the private investors be interested in capturing the rights to mine these minerals and metals? This must be a very profitable business.
Christopher Sheldon: Oh, you're absolutely right. The private sector - they do the detailed exploration for the minerals. That's absolutely correct, but it's a risky business and they like to put their money where they think the chances are best. So, this early exploration is where the government comes in. Just think of it a little bit, like trying to find a needle in a haystack, the government needs to do the initial work to help direct the private sector to the right haystack with the most potential. Then the private sector comes in and that's up to them to find the needle. Another aspect is knowledge: awareness raising it's really important for the overall effort. Chile, they're quickly transitioning their mining sector to being low carbon. And one of the instruments that help them think that through and how to really get there was a climate-smart mining roadmap that the Chileans developed using the climate-smart mining framework from the World Bank.
Roumeen Islam: So, we're doing two kinds of things, at least, from what I just understood. First, we're helping with the mitigating risk to find the haystack. And second, you know that Chile's using this roadmap. It demonstrates very well how important it is to have a global knowledge base that countries can draw on to do their own reforms. Shall we move on and talk a bit about the market-based solutions block?
Daniele La Porta: This is a great question, Roumeen and one that we're currently exploring through one of our projects related to forest smart mining. Historically the mining sector has tended to regard land impact as purely an issue of biodiversity. And this stems partially from a lack of awareness and we're working with various stakeholders to try and understand and address the problem.
Roumeen Islam: I think it's very important to work with the different stakeholders involved, both at the country level and globally to actually get at the root of the problem. But are you also working on any new tools that might help government and business to implement this overall climate-smart mining initiative?
Daniele La Porta: Yes. And right now, we're working on a really exciting tool. To help identify actions to curb emissions from these critical minerals, we are developing a lithium dashboard. So, what this dashboard does is map out the greenhouse gas emissions along the supply chain from lithium extraction and processing for lithium-ion batteries, all the way to EV assembly and shipment to customers. So, we intend this dashboard to be a tool for mining companies, manufacturers, governments, and policy makers, to measure the environmental footprint associated with the supply chain and help them make decisions on how to best reduce greenhouse gas emission actions.
Roumeen Islam: Okay. That's really terrific. Given how important lithium is in this whole exercise, I think a dashboard like that would be a very useful tool, particularly as it will allow everybody, the manufacturers, governments, to get around the same information base, particularly paired with the global knowledge that you've got on the climate-smart mining roadmap. So, when will this tool be ready?
Christopher Sheldon: It's fairly advanced, we actually expect it to be ready just in the next few months, by the middle of this year. Okay.
Roumeen Islam: That's very soon. That sounds good.
Christopher Sheldon: Yes, me too, we're very excited.
Roumeen Islam: Christopher and Daniele, thank you very much. That was a lot of information. Thank you.
Christopher Sheldon: Thank you very much. Great to be with you today.
Daniele La Porta: Thank you, Roumeen. Thanks for having us.
Roumeen Islam: Well listeners, when you're driving your electric cars, think about where it came from. I learned quite a bit about this. Here are some important things I'd like to share with you. Firstly, I learned that our increasing demand for low carbon energy must go hand in hand with ways to minimize the impact of renewables production on emissions and on the environment.
Secondly, sound management to mineral endowments requires a good understanding of what you owe and its value. Thirdly, mining can affect your water, your forests, land, and waste. Policies and regulations for the sustainable use of all your resources is needed. Finally, working closely with the private sector, innovative ways to finance all of this will be needed. Thank you, and bye for now. Don't forget to subscribe and thanks for listening. See you in two weeks.
If you have questions or comments, we’d love to hear from you. You can reach us at tellmehow@worldbank.org. Don’t forget to subscribe and thanks for listening!
This episode was recorded in June 2021.
View all episodes on our Tell Me How: The Infrastructure Podcast Series homepage