Clean energy’s gold rush for minerals used to manufacture electric vehicles, solar and other systems is not always sustainable and sometimes employs questionable labor practices, says a group that has released a mining toolkit to help the industry develop best practices.
The Energy Resources Governance Initiative’s (ERGI) toolkit aims to help educate the clean energy and international mining industry about the environmental and human rights impact of mining for lithium, cobalt, nickel, graphite and other minerals at times used in microgrids and other clean energy resources.
ERGI was formed by the governments of Australia, Botswana, Canada, Peru and the United States to educate the international mining sector about these issues.
“The goal of this toolkit is to guide the user through capacity building exercises to not only understand best practices, but how these best practices apply to their country’s specific context,” said the executive summary. The toolkit includes online interactive tools that showcase industry leading practices. Also included are case studies and guides to strategies and policies that create a mining sector that acknowledges important environmental and societal values.
Due in large part to cost decreases and increased demand for electric vehicles, solar, wind and other clean energy technologies, there’s been an uptick in demand for minerals such as lithium, cobalt, nickel and graphite, said the report.
Demand outpaces policy
“The current era of energy transformation is propelled by plummeting costs, driven by large scale production increases and rapidly evolving technology,” said the report. “The new energy landscape is changing so quickly that these trends often outpace policy.”
Many of the needed minerals are located in countries lacking a governance structure that can ensure mining leads to economic growth and benefits to society.
“The rapid onset of energy technologies has strained mineral supply chains, in some cases, enabling artisanal mining in poor working conditions or promoting child labor,” said the report.
However, proper oversight and management can yield sustainable mining practices, positive labor practices and economic development.
Mining toolkit offers clean energy view into choices
With the mining toolkit, ERGI aims to share best practices in sustainable mining development, from mineral discovery to the closure and reclamation of mines, said the report.
The mining toolkit allows clean energy companies to evaluate decision trade-offs during the mining life cycle. They can see how the choices they make affect investment, state revenues, infrastructure, the environment, job creation and local or indigenous communities.
“Underlying these tools are the concepts of community and environmental stewardship, and how to encourage mining entities to seek value beyond compliance,” the report said.
Value beyond compliance focuses on the relationship between economic performance and social progress. The goal is to provide social and economic benefits along with operational efficiency.
“Canada is an excellent example. As mining companies have innovated new technologies to meet and often surpass environmental requirements, such technology is exported for international mining projects.”
In addition, Canada’s Green Mining Innovation Initiative promotes end-of-life management, with abandoned mines used for waste disposal. The country has also covered areas of closed mining sites with pulp and paper mill waste with a goal of converting them into fields for biofuel crops.
Mining varies in four countries
The four countries that created the ERGI Toolkit have seen their mining sectors evolve in different ways due to governance choices, discoveries of resources, colonization and globalization, said the report.
“For example, while Peru has developed its mineral endowment since pre-colonial times, Botswana only experienced significant mining growth after its independence in 1966, beginning slowly with copper/nickel projects and expanding rapidly after the discovery of rich diamond resources.”
Australia, Canada and the US had small mining industries until the gold rushes of the 1800s, which led to mining policies, said the report.
“Major discoveries of cobalt, platinum group metals, or manganese, all critical for the energy transformation, are today’s modern gold rushes.”
The four countries that founded ERGI have different mineral resources. Peru is the world’s second largest copper producer. Canada produces about 60 minerals and metals. Australia is a leader in hard rock lithium mining.
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Some countries use their mining income to develop sectors that benefit the economy, said the report.
“Botswana has diversified its mining industry to include more copper/nickel projects and has reinvested diamond royalties in non-mining industries, while other partner countries have leveraged their early success to develop other mineral sectors or export technologies,” said ERGI.
It’s important for countries to identify and study their mineral potential through national geological surveys, which allow for gathering, analyzing and maintaining data and records.
“In many countries, a geological survey predates major mining industry,” said the report.
For example, the US Geological Survey (USGS) was created in 1879 to map resources and land acquired as a result of the Louisiana Purchase and territorial changes.
“After identifying mineral resources through a survey, the mechanism used by the state to convey mineral rights through licenses or leases can impact both sustainability and the long-term value of the resource to its population,” said the report.
Profit, people, planet
One way to promote sustainable mining is to adapt the Triple Bottom Line (3BL) approach, which focuses on profit, people and the planet.
“While the profit factor is measured by traditional business performance indicators such as the internal rate of return (IRR) for an investment, the people factor accounts for the employment opportunities and other social benefits delivered to the local community and indigenous peoples.”
The planet factor focuses on issues such as resilience and environmental responsibility.
“While not exhaustively addressing the full range of risk and performance factors that underpin a mining operation’s social license to operate — 3BL offers a useful model through which to holistically view a mining operation’s value to its hosts,” said the report.
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