HomeIndustry SectorsEnergy EfficiencyMining operations unprepared for carbon measures

Mining operations unprepared for carbon measures

Pic Credit: Investors Hub
The CDP report found that only six of the eleven miners disclose meaningful GHG emission reduction targets. Pic Credit: Investors Hub

In a CDP report released in November, the not-for-profit global environmental disclosure organisation concluded that large mining operations are “unprepared for the transition to a low-carbon economy”. For many mining companies, the main threat lies in new charges on coal.

The report, ‘Making the grade: are some miners chasing fool’s gold?’ found that nine out of the 11 large mining companies analysed oppose new climate regulation. Only two appear to be “supportive of climate regulation” and only a few mining companies consider slowing or selling-off their coal-mining activities.

The report uses data from CDP to assess whether the companies are taking action, such as setting meaningful emissions reduction targets, conducting water stress evaluations or preparing for the expected tightening and expansion of carbon regulation set to emerge from COP21 taking place in Paris this week.

Mining operations short-term actions

According to THEnergy, a German-based energy consultancy, many large mining companies have started to focus on short-term actions regarding powering their mines.

Energy typically amounts to approximately 20–30% of the operating costs of a mine, and strategies therefore have included renewable-energy projects such as wind and solar power at their mines.

Companies such as Rio Tinto, Glencore, BHP Billiton and Goldfields have already finished their first pilot power plants or have recently announced new projects, said a company statement.

However, James Magness, CDP Head of Investor Research, said: “This research is a canary in the coal mine for investors. It shows that the world’s biggest mining companies, currently worth over US$329 billion, are unprepared for the transition to a low carbon economy.

“Although there are clear signs of progress by some companies in areas such as energy efficiency and water resilience, the sector as a whole needs to up its game.”

“As a first step, all the large miners should be reporting meaningful GHG emission reduction targets and doing more to back new climate regulation”, Magness concluded.

Possible impact of COP21 decisions

Strict carbon-reduction decisions at the Paris climate conference could have a strong influence on the cost position of mines. Mining companies that manage to adapt early to the challenges of a low-carbon economy could gain significant competitive advantages.

Thomas Hillig, CEO of THEnergy explains: “Mining companies are in the process of understanding that renewable energy can largely improve their competitive situation. Many miners struggle, however, to make the necessary decisions quickly as they face severe market challenges from falling commodity prices at the same time.”

He further states that: “We are in a normal learning process, many mining companies have already understood that the prices of solar and wind power have decreased considerably in the last years.

“If significant carbon reduction measures are adopted at the Paris climate conference, we will see many solar and wind plants at mines in the very near future.”

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.