The future of sustainable mining, and by association the continuing drive towards greener forms of energy production, in an ever eco-conscious environment, will be driven by the “true” environmental, social and corporate governance (ESG) components of critical minerals, law firm Fasken partner Guy Winter said this week.
He spoke during a panel discussion on ‘Critical Minerals in the Covid-19 Era: Supply Chain and Survival’, as well as current legal trends, in a mining webinar on March 1, hosted by Fasken a week before the yearly Prospectors & Developers Association of Canada conference.
As of recent years, environmental battles have been fought and campaigns mounted by various activist factions, from Tesla lobbyists, to the person fighting “for their backyard”, said webinar host and Fasken partner Andrew House.
Winter added that the different forms of environmental campaigning presented a “fascinating dynamic” and laid bare the “dirty truth” that the clean energy sector is increasingly having to face up to.
Emotionally, he said, environmentalists would love to distance themselves from the mining sector, but in actual fact, the current energy transition (from being fossil fuel reliant, to being reliant on renewable and other green energy sources) is a “commodity-driven energy transition”.
Therefore, Winter said, anyone campaigning for greener forms of energy really needed to embrace the mining supply chain and find a way to work more effectively with it.
As an example, he pointed out that electric vehicles (EVs), solar and clean energy company Tesla has had some high-profile issues with the critical minerals used in its products. This is in relation to some commodities prevalent in conflict zones that may be mined using forced and child labour. “. . . for any company that uses cobalt in their products, there is an inconvenient truth that a lot of the world’s cobalt is mined in the Democratic Republic of Congo and there are some major question marks over the ESG quality of such products.”
Therefore, Winter said, it was “fair enough” to have a sentimental enthusiasm for EVs, but over time, and as the EV sector comes of age, they actually have to consider the true ESG footprint of what they are doing.
Similarly, he said, while it may appear “all good and well” to have products that go into what is ultimately a low-emissions vehicle, the fact that heavy fuel oil will be used to transport the commodities from somewhere like Africa, to Europe or Asia, means that a significant component of fossil fuel is embedded in any product made using that commodity.
As such, Winter said supply chains come up in green energy and mining discussions often. Matters that arise from some of these discussions unearth “a multitude of evils in terms of the true carbon footprint of products that are, on the face of it, gleaming and low emissions".
Going forward, he references a popular quote by Ivanhoe Mines founder and executive co-chairperson Robert Friedland. “There will be no more one price for copper. There will be no more one price for gold. Everything will be priced in relation to its ESG components and be priced in relation to how much global warming gas is created in making that commodity, because we're going to head to a price on carbon,” Friedland said earlier this year.
Friedland’s comment is “very relevant” to the supply chain consideration, said Winter, adding that important decisions would need to be made regarding paying a premium for critical minerals from countries where the ESG quality and ethics can be guaranteed.
“Therefore, the whole examination of the critical minerals supply chain has to ask some of those very inconvenient questions. [Such conversations] have to consider whether to export mining to other parts of the world, even if we are going to generate a whole lot of carbon emissions by having to transport it around.
“Equally, would we rather have mining operations in countries where we can guarantee the ESG quality of the product,” he concluded.