The World Bank has launched its Climate-Smart Mining Facility – the first-ever fund dedicated to making mining for minerals and metals a more sustainable practice that complements the energy transition and helps mitigate the effects of climate change.
The Facility will support the sustainable extraction and processing of minerals and metals used in clean energy technologies, such as wind, solar power, and batteries for energy storage and electric vehicles. It focuses on helping resource-rich developing countries benefit from the increasing demand for minerals and metals, while ensuring the mining sector is managed in a way that minimizes the environmental and climate footprint.
The Facility evolves out of a World Bank report “The Growing Role of Minerals and Metals for a Low-Carbon Future” which found that a low-carbon future will be significantly more mineral intensive than a business as usual scenario. Global demand for “strategic minerals” such as lithium, graphite and nickel will skyrocket by 965%, 383% and 108% respectively by 2050.
While the growing demand for minerals and metals offers an opportunity for mineral-rich developing countries, it also represents a challenge: without climate-smart mining practices, the negative impacts from mining activities will increase, affecting vulnerable communities and environment.
The multi-donor trust fund will work with developing countries and emerging economies to implement sustainable and responsible strategies and practices across the mineral value chain. The Facility will also assist governments to build a robust policy, regulatory and legal framework that promotes climate-smart mining and creates an enabling environment for private capital.
The World Bank is targeting a total investment of $50 million, to be deployed over a 5-year timeframe.
The Facility has already gained traction in the industry with partners including the German government and private sector companies, Anglo American and Rio Tinto.
Anglo American becomes founding sponsor
Diversified mining company Anglo American showed its commitment to the World Bank’s initiative by becoming a founding donor to the Climate Smart Mining Facility.
Building on the World Bank’s initial $2 million investment, Anglo American has committed to providing $1 million to the Facility over the next five years.
The Facility’s work will support the sustainable extraction and processing of mining products used in developing clean energy technologies, such as copper used in energy storage and electric vehicles. The fund will also work with governments and operators in developing countries to establish strategies for sustainable mining operations and legal frameworks that promote smart mining.
Anglo American shares the World Bank’s view that the energy transition will be mineral-intensive, creating economic opportunities for resource-rich countries and the mining sector.
“To have real impact we must work together with governments and operators to bring changes. That is why we are supporting the World Bank with this Facility, to provide funds that can transform our industry for the future,” says Anglo American chief executive Mark Cutifani.
“Mining cannot continue its long path of simply scaling up to supply what the world needs. We need to do things in dramatically different ways if we are to transform our footprint and be valued by all our stakeholders. Our first responsibility is to reduce our energy and water usage, and our emissions. At Anglo American, we have set ourselves on a journey to carbon neutrality operationally, with our 2020 and 2030 targets as staging posts. Our FutureSmart Mining technologies will be a key driver of this,” Cutifani adds.
Rio Tinto shows its support
Rio Tinto believes that the initiative will bring together governments, private sector companies, academic and research institutions to promote sustainable mining practices in resource rich developing countries.
Climate-Smart Mining has been developed in concert with the broader UN Sustainable Development Goals to ensure that the benefits from the transition to low-carbon technologies are shared.
It will innovate and deploy financing to scale up technical assistance and support for projects such as:
- The integration of renewable energy into mining operations;
- The strategic use of geological data for a better understanding of “strategic mineral” endowments
- Forest-smart mining: preventing deforestation, supporting sustainable land-use practices and repurposing mine sites; and
- Recycling of minerals: supporting developing countries to take a circular economy approach and reuse minerals in a way that respects the environment
The Facility will also assist governments to build a robust policy, regulatory and legal framework that promotes climate-smart mining and creates an enabling environment for private capital.
“The transition to clean energy solutions presents both a significant opportunity and responsibility for the mining industry, as it provides the materials that make these technologies possible,” says Rio Tinto chief executive J-S Jacques.
“We want to be part of the solution on climate change and the best solutions will come from innovative partnerships across competitors, governments and institutions. Our collaboration with the World Bank and many others is aimed at making a real difference by promoting sustainable practices across our industry. We look forward to supporting the Climate-Smart Mining Facility by contributing not just funding but also expertise as a leader in sustainable mining practices.”
According to World Bank senior director and head of the Energy and Extractives Global Practice Riccardo Puliti, “The World Bank supports a low-carbon transition where mining is climate-smart and value chains are sustainable and green.
“Developing countries can play a leading role in this transition: developing strategic minerals in a way that respects communities, ecosystems and the environment. Countries with strategic minerals have a real opportunity to benefit from the global shift to clean energy,” he says.