The global mining industry has undergone several significant transformations in recent years as it strives to respond to the shifting expectations of investors, consumers, and the wider society regarding its ability to contribute to positive social and environmental outcomes.
On a practical level, we have seen substantial and, in some cases, rapid sectoral progress on the decarbonization of mining operations as they embrace smarter technologies and more efficient processes, alongside renewable energy solutions. And we have concurrently witnessed an industry which now clearly understands the need to demonstrate high standards of responsible and sustainable business conduct, whilst being increasingly sensitive to the needs of host countries and communities.
However, an equally important change has been how the wider world has come to re-evaluate the mining sector, as awareness has grown of the range and volumes of metals and minerals that are required for achieving the transition to carbon-free economies, as well as the advanced technologies needed for growth and security. Anyone with even fleeting contact with the mining and metals sector will have noted the attention given to so-called critical minerals, and the discussions and debates which now dominate industry events and shape the perceptions and priorities of wider stakeholders – including, increasingly, policy makers.
There is no universal agreement on what critical minerals are, and various countries and institutions have their own definitions and criteria leading to the compilation of different lists of mined materials.
I use the term ‘so-called’ here, not to be dismissive, but to highlight a key point:
The Canadian Critical Minerals List, for example, contains 31 minerals, whereas the US has two different lists: the US Geological Survey Critical Minerals List containing 50 individual minerals, and the Department of Energy Critical Materials for Energy List which adds a handful of clean ‘energy materials’ (copper, ‘electrical steel’, silicon, and silicon carbide).
The Australian government has both a Critical Minerals List (of 30 items) and a Strategic Materials list (of 6) and the European Union has a list of 34 critical raw materials. The International Energy Agency and the World Bank have their own lists too. Also, these lists aren’t static. Yet, all of them define criticality through the lens of possible supply chain risks and constraints. It is important, therefore, to recognize that the criteria and context for defining criticality vary substantially from different regional and national perspectives and will involve localized judgments regarding issues such as the political and economic stability of producing countries.
The assessment and identification of a mineral as ‘critical’ has traditionally been based on government views regarding which minerals are vital to industries and technologies defined as strategic to national interests and ambitions, such as the military, and data and communication technologies. These priorities have now been supplemented and, in some instances, supplanted by the need to source materials that will enable the expansion and acceleration of the development of technologies to deliver a low-carbon transition to moderate a changing climate.
Simply put, it is now widely acknowledged that far more raw materials – and far more metals and mining – will be required to facilitate climate change mitigation via a transition economy. Estimates vary, but for a net-zero transition, it is expected that we will need at least six times more mined materials, even if we also increase recycled supplies. For many countries, sourcing these minerals at such scale will be a very significant challenge, hence the urgency with which critical minerals policies have been formulated and formalized in regulations.
Gold, however, has typically been excluded from these considerations. This is perhaps understandable if the priority is to manage local supply chain risks; unlike many other metals, gold production will not need to multiply to support its role in clean energy infrastructure. Whilst more gold will likely be needed in the electrification of vehicles and transport systems, production will not need to soar to satisfy new demand. And gold is, theoretically at least, readily accessible across the globe, with plentiful above-ground stocks that might be utilized accordingly. It therefore scores relatively lowly in national assessments which rank a metal as critical because its supply needs to grow but is likely constrained or subject to potential disruption. On that basis, gold is not critical.
But let us remember a few key aspects of the overall objective – that is, the transition to a decarbonized economy.
First, this is a global endeavour; national interests and national capacities to decarbonize domestic economies make little sense if other countries cannot decarbonize in an aligned or complementary manner. With that shared objective in mind, overly localized definitions of criticality can start to look less rational and somewhat ‘blinkered’.
Second, regardless of the production of renewables hardware, significant questions remain as to how and where clean energy technologies are to be implemented, and who is to implement them ‘on the ground’. This is where gold is particularly important – not in the use of the metal but, looking upstream, in the consequences and impacts of how gold mining is decarbonizing.
Most global gold supply chain emissions are generated from mining operations – for the most part, from their generation and consumption of electricity. Gold mining is therefore not only likely to benefit from the decarbonization of power, but it can also be a significant contributor to decarbonizing local economies, particularly where there is no grid power and miners therefore need to initiate structural change.
Third, if gold mining is, in many cases, the ‘first mover’, and the initial catalyst in bringing renewable energy systems to a developing country or remote location, it can facilitate the economic viability and local reach of renewables well beyond the mine. Regardless of nomenclature, we should certainly acknowledge gold mining’s potential ‘strategic’ importance, given it can drive local transformation by helping decouple economic and growth opportunities from increased carbon emissions – a relationship that was previously intrinsic and inevitable.
These critical – sorry, ‘strategically important’ – impacts are happening now. The expansion of hydropower in Kibali in the DRC has also enabled clean energy to be fed into the local grid, whilst developing and expanding local skills and expertise in renewable power systems. The pressure from precious metals miners in South Africa has been pivotal in the regulatory shifts to allow self-generation of clean power at an industrial scale, as witnessed in the rapid deployment of a large solar array at the South Deep mine, just north of Johannesburg. And that helped open the door for the solar and wind projects we are now seeing across the country.
Indeed, gold mines have been key in pioneering renewable energy (plus electrification) systems across the globe, but in remote and ‘frontier’ economies their actions and impacts are particularly significant. In locations that otherwise lack the capacity and resources, and often the political will to drive structural change, an effective and just transition is unlikely without the progressive actions of responsible corporate actors. In such places, that makes the climate-focused actions of gold mining companies highly ‘critical’.
