Tell us a bit about your work at the Columbia Center on Sustainable Investment.
The centre works to promote the development and promotion of investment policies and practices that advance sustainable development. I head the Mining and Energy team and focus at the centre. Through research, training, and advisory projects I work on the impact of the energy transition on extractive industry investments and resource-rich countries as well as on the deployment of large-scale investments in renewable energy, zero-carbon industrialization, and economy-wide decarbonization. I also lead work on the governance of extractive industries looking at a range of issues (legal, fiscal, infrastructure, local content, communities, and environment).
How would you define sustainable investment?
We define sustainable investment as investment that advances and does not harm progress towards the Sustainable Development Goals (SDGs) and the Paris Agreement.
What is the role of sustainable investment for the mining industry as we work towards a more decarbonized global economy?
Mining has an incredible role play in achieving the SDGs. The world needs more and more minerals to satisfy the green transition and the growing material needs of a growing population. So, minerals are key to economic development and green growth. However, mining can also have terrible social and environmental externalities that should be avoided at best and mitigated at worse. Mineral extraction and processing is also energy intensive and contributes a great deal to global emissions. Mining can also exacerbate the physical impact of climate change on vulnerable regions. In short, mining can only continue and expand if it is strictly sustainable and climate-smart. Even though mining could be made much more sustainable, it shouldn’t discourage policy and R&D efforts in encouraging and devising solutions to ensure the recycling of minerals along the supply chain as it has the potential to satisfy our needs even more sustainably than sustainable mining.
Minerals are key to economic development and green growth
Where do you see investment flowing and where are the critical gaps at the moment?
Massive investment flows are still flowing towards mining that is not sustainable. Short-term incentives are still driving finance despite the rise in the so-called “ESG investments” and the rise in downstream players’ commitments to clean up their supply chains. There is still a disconnect between headquarters’ sustainable mining policies and operational management and staff at mine sites.
Analysts have warned of a looming supply deficit in the coming years for some of the critical “battery metals” that will help fuel the green transition. What can be done to mitigate this lack of supply?
A few things need to happen. We need international collaboration on a global governance system for the regulation of supply and demand of these minerals, instead of national and regional races for mineral and energy security. We published a study by our colleague Saleem Ali at the time proposing a concept called the Smart Mineral Enterprise Development (SMED), which entails a partnership between public and private entities to consider pathways whereby public sector data sharing on geology can be coupled with research innovations in the private sector, both upstream and downstream of mineral supply. Just as smart energy grids harness efficiencies in electricity supply and demand through a dynamic process of communication, SMED processes can do the same for key technological bottlenecks in mineral supply. These research innovations would also include making great progress on recycling of minerals along the value chain and at the level of tailings dams at mine sites.
Another thing to consider is that the demand for battery minerals needs could be dampened if the sectors of the economy could be more interconnected. For instance, the life of a battery that can’t serve transportation needs anymore could be extended to serve renewable power generation.
What are some of the key changes you’d like to see in the mining industry today to make it more sustainable?
Despite much progress, the mining industry is still tarnished by social and environmental externalities, with a good number of miners still considering their responsibility in terms of evaluation, avoidance, and mitigation of social and environmental impacts as a rubber stamp. An objective way to measure the entrenched way of carrying out non-sustainable mining is to use the data released by the Responsible Mining Foundation. Sustainable mining is now compounded by the just energy transition agenda.
Decarbonization of mining operations should be front and centre of mining houses and, fortunately, the technologies are now mostly all affordable and there is a business case. Take process optimization, renewable energies, electric vehicles and, very soon, green hydrogen trucks as demonstrated by the latest pilot of AngloAmerican. On top of this, all opportunities for circularity should be systematically identified at mine sites (water, heat, land, waste, and leasing of equipment) and along the value chain.
The business model of mining companies might have to shift to consider how to satisfy the growing material needs, whether that’s from primary virgin extraction or from secondary sources rather than maximizing extraction. Lastly, mining should also deal with the so called “just transition”, ensuring that the workforce in host communities and countries is prepared and can seize the opportunities offered by sustainable modern and clean mining. There are a lot of challenges to take up, but showing leadership in the face of these is the only way for mining to reclaim its social license to operate.
About Perrine
Perrine Toledano heads the Center’s focus on Mining and Energy. She leads research, training, and advisory projects on the impact of the energy transition on extractive industry investments and resource-rich countries as well as on the deployment of large-scale investments in renewable energy, zero-carbon industrialization, and economy-wide decarbonization. She also leads work on the governance of extractive industries. She has led projects in DRC, Liberia, Paraguay, Mozambique, Sierra Leone, Tanzania, and Timor- Leste, and assisted many more government teams remotely.
