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Mining companies must step up efforts to protect the environment or they will be blocked from developing the supplies of metal needed for the global transition to clean energy, one of the sector’s top executives has warned.
Jonathan Price, chief executive of Teck Resources, one of Canada’s largest mining groups, said government and local opposition to mines for copper, lithium and iron ore will grow unless the industry improves its record.
“Resource nationalism is a risk to the energy transition because we need to be encouraging investment in new mines and new capacity for the future if we are going to meet the demand we see ahead,” he told the Financial Times.
The perception of the industry’s harmful impact on nature has prompted some governments to take greater control over resources, referred to as resource nationalism, which conflicts with the interests of multinational mining groups.
These tensions have resulted as mining projects, which are typically vast infrastructure initiatives, inevitably cause environmental harm ranging from deforestation and stripping animals of their natural habitats to polluting local freshwater supplies.
Price’s comments came as the International Council of Mining and Metals, a trade group representing a third of the global industry, unveiled new commitments to protect nature and biodiversity in what it claimed was the first announcement of its kind.
Under the commitments, companies including BHP, Rio Tinto and Anglo American must disclose nature-related risks and impacts of their projects by 2026, ensure no net loss of biodiversity when they close mines and work with suppliers to halt and reverse nature loss by 2030.
ICMM said that the scope of the industry’s commitments covered its impact on land, freshwater, oceans and the atmosphere.
Unless indigenous and local communities are satisfied that mining groups will operate to high environmental standards, then “those mines or operators might not be able to achieve permits”, said Price, who is chair of ICMM’s nature advisory group.
If those commitments can be delivered on, then “it may temper some of the more extreme views that some in government may hold that go against the industry’s interests”, added Rohitesh Dhawan, president and chief executive of ICMM.
The International Energy Agency said there would need to be a big increase in the production of metals such as copper, lithium and iron ore in the coming years for the world to achieve net zero emissions by 2050, which will require building wind farms, electric cars and power lines.
The mining industry’s ability to keep up with surging demand is, however, hamstrung by local community opposition and increasing challenges in securing environmental permits.
For example, carmakers are concerned about the production of nickel in Indonesia because of deforestation and fears of biodiversity loss.
Another example is in Panama, where one of the world’s largest copper mines is being shut and has been accused of causing irreversible environmental damage on social media.
Last year US authorities blocked a copper-nickel project in Minnesota to preserve a wilderness area.
Price’s own company Teck has also been under fire from NGOs about the environmental impact of its mines including water pollution at the Elk Valley coal mines in Canada, which it agreed to sell to Glencore for $9bn in November.