How the revolution in electric vehicles is changing mining

How the revolution in electric vehicles is changing mining

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For decades, communities around the world have too often been betrayed by promises that mining would yield financial prosperity and return to them the landscape as good as it was found. Many have ended up with environmental destruction with very little benefit to show for it.

But the car industry and its massive demand for minerals and metals for building and powering electric vehicles could change this paradigm.

Amid the push for new, more climate-friendly sources of energy, the market has seen an equally unprecedented rise in demand for lithium, cobalt, nickel and other minerals. These materials, linked to wind turbines, solar panels, EVs and batteries, derive from the mining sector, which has long been associated with irresponsible practices.

Consumers who buy EVs view themselves as active participants in a commitment to heal the planet. With their climate-conscious consumers in mind, car companies are analyzing the environmental and social impact of every material in their supply chains.

Although some governments are increasingly requiring companies to undertake due diligence, regulatory levers often move slowly. It is the call from the market, supported by demands from civil society, that is sparking change at the mine site, where change is most needed.

We now know that the mining sector, encouraged by the right incentives, has the potential to embrace a radical transformation. Among those driving hardest for such a change are the world’s largest carmakers — BMW, Mercedes-Benz, Ford, General Motors, Volkswagen and Tesla have signed on to the Initiative for Responsible Mining Assurance (IRMA), joining United Steelworkers, Anglo American, Microsoft , Tiffany, and others.

To better understand the risks in their sourcing of raw materials, the car companies are asking miners feeding their supply chains to undertake IRMA assessments.

Eleven mines are at present under independent review; another 73 mines, owned by 50 different companies, are using IRMA’s self-assessment tool to prepare for independent third-party evaluation. Governed equally by all stakeholders, including community representatives, civil society and labor unions, IRMA offers a global standard for mining that has been hammered out in a collaboration with the private sector.

Transparency around the environmental and social impact linked to the minerals used in products such as phones, computers, cars, jewelery and batteries allows brand owners and consumers to demand improvements in practices that harm people and the planet.

This, in turn, should increase the market value for minerals that are mined responsibly, as well as for minerals sourced from recycling and reuse, and more durable products.

Our goal is a world where the mining industry respects the human rights and aspirations of affected communities; provides safe, healthy, and respectful workplaces; minimize harm to the environment; and leaves positive legacies.

Carmakers are using their massive buying power to speed progress towards this goal, in part by ensuring the mining industry that the market will value their effort.

Yet market forces alone cannot transform the entire mining sector. Voluntary initiatives will never replace the critical role of law and government in setting rules that all companies must follow.

Given that most mining companies will comply with national laws wherever they operate, we need governments to pass legislation and enforce those rules.

But governments tend to move slowly, and some miners are known to lobby to stop regulatory changes. There is a growing demand for more responsible mining and governments should require companies to use IRMA’s Standard for Responsible Mining as a means to ensure sustainable mineral production.

Proper performance of supply chains that support climate solutions should be judged by whether they bring less harm, not more, to an already climate-stressed world.

Our experience with the mining sector suggests it is possible to prevent backsliding on climate commitments. As long as the proper levers are in place, safe and sustainable supply chains can be balanced with security of supply even through pandemics and conflicts.

Aimee Boulanger is executive director for the Initiative for Responsible Mining Assurance

Climate Capital

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