As many countries shift their focus from planning the shift of the energy sectors from high- to low-emissions fuels and technologies to implementing these plans, mining has become central to the climate and just energy transition debate.
This was evident at the most recent UN climate conference, COP28 which took place in Dubai last year, said Katie Ferguson, head of sustainability for global miner Anglo American.
There was a shift at COP28, she said, to countries debating how to best implement energy transitions that would support them in meeting their global climate goals.
“One of the most important pledges was a commitment by many mining companies to triple their renewable energy production by 2030,” said Ferguson, who was part of a panel discussion at the Investing in African Mining Indaba in Cape Town on Tuesday.
Mining’s importance to the energy transition is not limited to the contribution mining companies could make in cutting emissions by investing in renewable energy; the sector also has to expand the production of critical minerals such as copper, lithium, nickel and cobalt that are essential components in many clean energy technologies such as solar panels, wind turbines and batteries.
The role that coal and coal mining will play in the energy transition remains a point of contention.
Michelle Manook, CEO of FutureCoal — a representative body for the global coal industry — said there is much misinformation about coal and the role it could play in a future energy mix.
“The future of coal lies in how India and China approach coal,” she said. These countries, she said, have a “sophisticated way of looking at coal” and are investing in carbon capture and storage technologies, which could help eliminate much of the emissions associated with the burning of coal.
“It is interesting to hear people talk about the phase-out of coal — it’s a finite resource and it will be phased out eventually [as resources deplete], but it still has a role to play,” said Manook.
Influential investor
Adam Matthews, Church of England Pensions Board chief responsible investment officer, had a different view, saying that the use of coal with abatement technology must first be proven at scale before it would be seen as part of an “orderly transition”.
The Church of England Pensions Board, which holds about £3.5bn (R83bn) funds under management for its about 41,000 members, has become an influential investor voice on issues such as responsible investing.
It made headlines last year when it announced it would offload its stake in British oil and gas company Shell as part of a decision to divest from oil and gas.
Matthews said the mining sector has not been at the forefront of responsible investors’ minds, but there is a growing realisation that the transition cannot happen without mining.
As a pension fund, he said, their role now is to better understand what future minerals demand would look like and what challenges the mining sector faces in meeting that demand.
“We can invest in a way that enables [the sector] to meet that demand by focusing on companies that will align with an orderly transition,” he said.
They are willing to work with companies in hard-to-abate sectors if those companies have a “credible transition path”.
“When companies don’t disclose [transition strategies and their progress] and when they use industry association to delay international processes [towards a just transition] which will make it less likely to have an orderly transition, that is when we disinvest,” he said.
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