Part 3 — The headwinds that beset mining’s new role as the planet’s unlikely saviour

The mine dumps that have long been a feature of Johannesburg’s landscape are slowly vanishing — vivid testimony to the fact that mining’s toxic environmental, social and health legacies can be reversed.

At the coalface of such efforts are companies such as DRDGold, which has, over the past 12 years, removed and reprocessed about 140 mine dumps, restoring 700 hectares of land.

DRDGold has paid dividends consistently for the past 18 years, proving that a mining company can generate cash while doing good.

Mine dumps are visible, but many of mining’s other pernicious consequences are invisible. These include the greenhouse gas emissions that its activities have released directly and indirectly.

With the scramble for the metals and minerals needed to decarbonise the global economy, mining’s new role as the planet’s unlikely saviour faces several headwinds.

One is climate change itself. Extreme climate events are a growing risk to mining operations and production — a case of the spectre unleashed by mining haunting the industry itself.

Another is the public awareness spawned by the climate and other environmental crises in recent decades. This is a force for good as mining companies face increasing regulatory scrutiny on the environmental, social and governance (ESG) fronts. They no longer have a licence to trash the planet and run roughshod over human rights — literally a licence to kill.

Indeed, much of the industry has embraced the ESG zeitgeist with the fervour of the converted.

However, this also threatens to delay or scuttle projects needed to extract the minerals required for decarbonisation. While much of the mining sector is on board with decarbonisation and ESGs, many operators in the value chain remain wedded to the industry’s legacy of exploitation, corruption and ecological degradation.

Meanwhile, coal is defying its obituary writers as it casts itself as critical to the green energy drive.

Climate risks 

A PwC report in July found that “copper mines, which require a steady water supply to function, face increasing risk from severe drought due to climate change”.

The report focused on the copper needed for semiconductors, which are required for everything from computers to washing machines. They also play a crucial role in the green energy transition — solar panels and wind turbines cannot operate without them, and electric vehicles (EVs) and charging stations also require the technology.

“If we don’t adapt, within 10 years a third of all semiconductor production will be reliant on copper at risk from climate disruption. By 2050, it could be nearly double that,” the PwC report warned.

Copper production in Zambia was curtailed in the wake of an intense drought triggered by the latest El Niño weather pattern, which crippled the capacity of the Kariba Dam — the world’s largest human-made lake — to generate power.

There has been a deluge of extreme weather events in recent years that have hampered mining operations across the board. Heavy rains in the first quarter of this year hit South African mining production.

Sibanye-Stillwater’s palladium-rich operations in the US state of Montana were severely affected in 2022 by a catastrophic “once-in-a-century” flooding event. Because of climate change, such disasters will become more regular, and the “once-in-a-century” events will conceivably become “once-in-a-decade” events.

These examples are just the tip of an iceberg that is bearing down on the mining sector. The greenhouse gas emissions unleashed by its activities threaten it and its capacity to confront a crisis of its own making.

ESG — a double-edged sword?  

High up in the Chilean Andes, JSE-listed Gold Fields has 80 full-time staff at its Salares Norte mine with one purpose — and it is not related to gold production.

They are dedicated to the round-the-clock monitoring of a colony of 25 endangered chinchillas — furry, rabbit-sized rodents — that the company is translocating as a condition of its environmental permit.

The saga has had many twists and turns — some of which have been farcical.

Read more: Tito the chinchilla represents a milestone for Gold Fields in Chile

“Operation Chinchilla” is pertinent to this discussion because it would have been inconceivable a few decades ago, underscoring the lengths that many listed mining companies go to these days to minimise the threat of their operations to wildlife and the wider environment.

The ESG movement is not just about “greenwashing”, and it has tangible benefits. Many publicly listed mining companies — in the face of activism from affected communities, NGOs, unions and public concerns reflected in regulations crafted by governments — are cleaning up their acts.

There are many initiatives on this front.

“While a tonne of metal from different sources is indistinguishable to the eye, whether it has been produced, processed and recycled responsibly carries immense implications for society and our planet,” say the organisers of the Consolidated Mining Standard Initiative.

The initiative aims to create a global standard that reduces complexity while raising the bar on ESGs and other areas.

Virtually all major mining companies have “net-zero emission” targets and are decarbonising their operations. They are also striving, on paper at least, to engage with communities they previously ignored, brutalised, exploited, and ripped off while trying to ensure that their activities do not inflict lasting damage on the environment.

One of the many ironies here is that mining itself needs mined material to meet many of these goals, not least its “net-zero emission” targets to power itself into a sustainable future.

Mining, like all other sectors of the economy, cannot exist without mining. The keystone industry itself will collapse if it is removed from the arch of the global economy. Like the coal miners evoked in Zola’s 19th-century novel Germinal in Part 1 of this series, it would be buried like a mole with the rest of us beneath the debris.

At play here is a double-edged sword. In its seemingly improbable role as the planet’s saviour, mining’s existence is not possible without more mining. And it needs to grow endlessly, while the resources it extracts are finite.

Geological time is long-term — it takes millions, tens of millions, hundreds of millions, even billions of years, helped by meteorite impacts — for the Earth to produce the minerals we need at this juncture.

Viewed through this prism, almost all of the current and often worrying production and supply forecasts are but a speck in geological time.

And yet, often pressing and legitimate ESG concerns are delaying or shuttering mining projects that we need now to address climate change and — hopefully — create widespread prosperity.

One example is the Cobre Panamá copper operations owned by Canada-based First Quantum Minerals — one of the world’s most productive copper mines — which was shut in late 2023 after mass protests triggered by environmental concerns and perceptions that Panamanians were getting a raw deal.

Like the extreme weather events linked to the GHG emissions that the mining sector itself has unleashed, a perfect storm is brewing that could cripple the industry’s efforts to curb or reverse its legacy.

Back to the future

In its 2018 annual report, the global mining, energy and trading giant Glencore proclaimed that it was “responsibly sourcing the commodities that advance everyday life” —  a slogan the company long used.

But 2018 capped a decade of criminality that subsequently threw Glencore’s claims of “responsibly sourcing” into sharp relief.

In 2021, Glencore International AG and Glencore Ltd pleaded guilty and agreed to pay more than $1.1-billion in fines to resolve investigations by the US Justice Department into its violations of the Foreign Corrupt Practices Act and a commodity price manipulation scheme.

Read more: Glencore to pay R1bn fine after pleading guilty to graft and market manipulation

“The scope of this criminal bribery scheme is staggering,” said Damian Williams, the US attorney for the Southern District of New York.

The countries where this skulduggery took place included Nigeria, Cameroon, Ivory Coast and Equatorial Guinea — a wretched example of the corrupting and corrosive influence of the extractive sector on developing economies prone to state failure.

This all took place less than a decade ago. It’s not ancient history.

The term long used to describe this state of affairs is the “resource curse”, but legitimate initiatives like those cited above are under way to break its spell.

However, many concerns remain about the “responsible sourcing” of metals and minerals in the value chain, including those in the device on which you are reading this.

Cobalt — a crucial ingredient for rechargeable batteries such as those that power EVs and cellphones — stands out in this regard.

Democratic Republic of the Congo (DRC) accounts for about 70% of the world’s known cobalt reserves, and there are widespread allegations about the exploitation of artisanal miners — including the use of child labour — in the extraction of the blue metal there.

Estimates of DRC’s cobalt production from artisanal and small-scale miners (ASMs) are as high as 20%. Respected NGOs such as Save the Children have drawn attention to this issue.

The Cobalt Institute, an umbrella group for the industry, maintains that the figures and scale of the exploitation have been wildly exaggerated.

“Due to market surplus, ASM production has reached a record low, with ASM accounting for an estimated 2% of total cobalt supply from the DRC in 2024,” it says.

The World Bank estimates that as many as 45 million people are engaged in ASM mining, and while some make a decent living, many toil in appalling conditions and are subjected to ruthless conditions.

In South Africa, the explosive growth of zama zama activity — and its linkages to organised crime, environmental damage and massive costs to the industry and wider economy — is a glaring example of this trend.

The wider point here is that the production and value chains of many of the metals needed for the green energy transition and other purposes remain deeply tainted. Despite the industry’s demonstrable efforts to leave its sordid past behind, many of the skeletons rattling in its closet are still fresh.

In closing, it is of more than passing interest that Old King Coal is refusing to relinquish its stained crown.

Read more: As our planet burns, the coal sector is reinventing itself

Global coal use rose to an estimated record of 8.77 billion tonnes in 2024, according to the International Energy Agency, and the fossil fuel still accounts for 35% of global electricity generation.

Several major US banks — including Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Goldman Sachs, JPMorganChase and Britain’s HSBC — have quit the Net Zero Banking Alliance convened in April 2021 by the UN Environment Programme, throwing a financial lifeline to coal and other fossil fuels at a point in time when it seemed that they would be cut off from the capital they needed to stay afloat.

Coal, by the way, does have a role to play in the green energy transition. Your typical wind turbine requires 260 tonnes of coking coal. And the coal sector itself is decarbonising its production base.

Forecasts for the fossil fuel have brightened of late. Global coal demand is seen remaining buoyant, with coal-fired power generation potentially staying dominant through 2030, well beyond current projections, says a recent report from Wood Mackenzie.

The keystone industry may yet remove the arch that triggers its own collapse — and with it, the global economy and life as we know it will come crashing down.

Or it has the potential to save the planet. The grade it gets on this score will not just be measured in ore. DM

Read part one of this series here: Keystone Industry: How mining became the planet’s unlikely saviour

Read part two of this series here: The new minerals rush to save the planet from mining’s legacy