Is it the pandemic we had to have? For decades, if not centuries, Mother Nature has been copping a hammering at the hands of humans. As Covid-19 tightened its grip on the globe and forced some of our most polluting industries to halt, we've seen miraculous happenings.
- Take the reports from India for instance about being able to see the Himalayas clearly from 200 kilometres away for the first time in decades.
- Look at the European Space Agency's Sentinel-5P satellite measurements and you'll notice that NO2 levels over Europe and Asia's major industrial regions and cities during the first 2 months of 2020 were some 40% down on the same time last year. Italy is particularly spectacular in this regard. So is China – at the peak of the pandemic there, air pollution levels nose-dived. That's what happens when one of the world's biggest NO2 emitters, and certainly Asia's biggest, locks down more than half a billion of its citizens and halts much of its industries! Indeed, calculations show that a 'mere' 10% reduction in China's emissions equates to removing some 48,000 cars from circulation. China has around 340 billion vehicles driving around…. The math is mind boggling.
- When the UK decided to implement a nationwide lockdown at the end of March, NO2 levels in some of the major cities there dropped by up to 60% on March/April 2019 figures. All within 2 weeks.
- On the other side of the world, NASA noted that NO2 levels over some of the USA's major urban areas in the northeast of the country (New York etc) were down by 30% in March compared to the March average for the past 5 years.
The list goes on, sending a very clear message to those prepared to heed it. Namely that we have been handed a once in a lifetime chance to experience what happens when some of the most polluting industries and activities on earth are shut down or reduced. Where previously we've been treated to numbers on paper based on theories, guesswork, and extrapolations around 'what ifs', we're now seeing real results in real time. That's unprecedented!
Planes, trains, and automobiles …. what are the world's most polluting transport activities?
Statistically, whilst air traffic does contribute to global NO2 levels, it's less than 2 to 3% of the total. They do however contribute significantly to CO2 emissions.
Electric trains don't produce any NO2 in and of themselves but as with anything electrical, they're only as environmentally friendly as the electricity that powers them. Many parts of the world though still rely on diesel and even coal burning steam engines. In the UK for example only 42% of the rail system has been converted to electricity, leaving diesel trains chugging away on the remaining 58%.
Then we come to our beloved horseless carriages, AKA automobiles. They produce about one tenth of direct NO2 emissions. When vast numbers of people stopped driving about in them because of covid-19 global lockdowns, it made a significant contribution to those double-digit percentage drops in NO2 emissions during January and February. As a case in point – according to some calculations, the 40% reduction compared to last year that we saw over parts of China in that period can be likened to taking 192,000 fossil fuel reliant motor vehicles out of circulation.
Expand these statistics globally. Phasing out fossil fuel guzzling modes of transport and replacing them with cleaner, greener electric and hydrogen vehicles will make a huge dent in the amount of NO2 we pump into the environment. We've been shown this in no uncertain terms over the past few months. People around the world are reporting that their air seems to be cleaner, purer than before the pandemic. There are reports of wildlife activity increasing within urban areas. Birds and insects are returning as human activities reduce and pollution clears. We also have the statistics to back up these observations. Although it has to be said – if diesel generators are providing the electricity at the charging stations for those electric vehicles, it puts a bit of a damper on the whole concept of 'clean, green vehicle'!
To truly clean up our act, we have to replace not just fossil fuel guzzling vehicles but also fossil fuel guzzling power plants. This means ramping up our use of renewable energy and various other low-carbon electricity generating sources. According to reports like this one, switching off 500 coal-powered power stations for 12 months, or replacing them with 'green' alternatives, would result in a 10% reduction in direct electricity generation caused NO2 emissions.
What is mining's role in all this?
If the world grasps this extraordinary opportunity to clean ourselves up, experts expect to see several trends emerging post coronavirus. Key amongst these is an increase in investment and interest in renewable energies. There are very good economic and environmental reasons why this should happen. It will encourage much-needed economic activity, and contribute to reducing the impacts of global warming. Win win situation all round. However, it will need a major mindset rearrangement in countries where digging up coal for short-term financial gain still trumps the long-term benefits of looking after the environment!
In a report released on May 11, 2020, the World Bank stated that globally the production of minerals like cobalt, graphite and lithium would need to be ramped up by 500% by the middle of this century if investment levels in renewables goes as predicted. The same report also noted that it will take some 3 billion tonnes of metal, and minerals, to manufacture the renewable energy sources and storage needed if we want to keep global warming below 2oC. It won't just be cobalt and lithium in high demand either. Demand for aluminium, chromium, copper and molybdenum will also rise significantly.
That's good news for developing countries where economical reserves of these types of minerals are located. However, despite the World Bank's prediction that such demand will drive economic growth in those countries, pundits predict that, initially at least, it will be developed countries with the infrastructure and regulatory frameworks already in place who stand to benefit the most. That's inevitably mining powerhouse countries like Australia, Canada, the United States and Chile, all of which also have significant reserves of many of these minerals.
What does this mean for CEO's of mining companies currently wondering how the post-covid landscape is going to look?
One thing is clear. One hundred and ninety-five countries are currently signed up to the 2015 Paris Agreement on climate change. A quick consult with Google will tell you that there are only 195, or 197 depending on which site you visit, countries anyway. So, 'literally' every country in the world has agreed in principle at least to do what it takes to keep global warming under 2oC.
Mining plays a key role in many supply chains that contribute to global emissions and obviously it will play a similarly pivotal role in supply chains designed to reduce those emissions. Not to mention the fact that the industry itself also needs to set and meet its own emission-reduction goals. Currently mining produces, or is responsible for, a significant percentage of global greenhouse gas emissions. There are the emissions produced
- directly by mining operations themselves,
- indirectly by the industry's voracious requirement for power generation
- indirectly through the mining and sale of commodities like coal, a major contributor to global greenhouse gases.
For mining CEO's this presents several issues. First, obviously they have to put their own houses in order. This means prioritising emission reduction and de-carbonising measures.
Second, they have to look at how climate change is going to affect mining assets and implement measures to counteract these. Chief amongst them are:- increasingly unpredictable weather patterns that will cause hazardous working conditions and property damage
- less rainfall and extended droughts that will exacerbate existing water stress issues, and create favourable conditions for catastrophes like fire storms
- flash flooding that will create high water concerns for tailings dams, mine closures and lost productivity, infrastructure damage etc
Third, they must factor in how meeting Paris Agreement commitments is going to shift global commodity demand and prices. Two sections of the industry immediately spring to mind in this regard – natural gas and petroleum, and coal mining. Coal currently accounts for around one half of global demand for mining 'products' and is going to take a heavy hit over the next few decades. Diversify or die could well be an apt description of the dilemma coal mining company boards will be facing!
Also significantly, as an integral part of the whole decarbonisation process, mining portfolios will have to factor in both the costs and the effects of decarbonisation in other industries. Manufacturers and consumers will be increasingly looking for carbon-neutral components and products respectively. Apple and many other manufacturers are already committed to sourcing sustainably and ethically produced components, from raw materials to end product. That list will only grow.
