The mining industry is changing rapidly with the global push for more sustainable practices as ESG funds, OEMs, and stakeholders demand positive change to traditional mining methods.
There is good reason for this - mining has often been associated with significant environmental impacts such as habitat destruction and deforestation, soil erosion, air and water pollution and waste generation.
Mining operations in Brazil have also not had the greatest history of sustainable practices, however this is changing and there are positive developments and a brighter future for green mining in Brazil.
Environmental impacts on mining sites is important globally as OEMs and car makers assess upstream investments and legislation such as EU Battery Regulation requires notification on CO2 footprint for batteries sold within the EU.
According to a forecast by the German Raw Materials Agency (DERA) the global demand for lithium will likely fall between 1.68 and 2.98 million tonnes of Lithium Carbonate Equivalent (LCE) by 2030. On top of this, the supply chain from China is not guaranteed, and EU car makers are increasingly looking at investing directly in mines.
In late 2023 VW and Stellantis announced they were supporting the purchase of two Brazilian mines for nickel and copper. The deals did not proceed – but the future is clear – greater investment from OEMs and car makers into mining operations. And these OEM’s and carmakers will not invest unless there is sustainable or green mining occurring.
The new pathway is all about “green mining” as it is increasingly recognised the world cannot build a sustainable energy system with unsustainably mined minerals. Mining companies are aware of the costs of not taking positive action such as reputational damage, higher cost of capital, legal actions, and government intervention.
Some of the world’s biggest investors are backing a plan to reform the mining industry so it can meet the growing demand for minerals and metals needed for the green transition. Investors overseeing a combined US $11 trillion including Legal & General Investment Management, are among the first to back the Global Investor Commission on Mining 2030.
The Commission’s objective is to “define a vision for a socially and environmentally responsible mining sector” and introduce a set of global standards for the industry covering issues from child labour to biodiversity loss.
In the UK, the International Council on Mining and Metals (ICMM) was founded in 2001 as a CEO-led leadership organisation with a goal to improve sustainable development in the mining and metals industry., Its members include BHP, Barrick Gold, Glencore, and Rio Tinto.
Rohitesh Dhawan, the CEO of ICMM has said “despite the importance of mined products to modern life, the reality is that industry has failed to earn the broad-based trust of society. Changing that is, first and foremost, the industry’s responsibility, but it is in everyone’s interest to see that happen, for never before has the world needed so much from an industry that is trusted so little”.
So, how does the mining industry go green and become more sustainable?
Green mining involves use of advanced technological advances and best practices to achieve the extraction of minerals and metals while mitigating the environmental impacts of the process. There are several key parts of the mining lifecycle these practices can be applied to such as power consumption, water usage and mine decommissioning.
It has been estimated that global mining uses around 20% of the worlds water supplies. Enhanced technologies have allowed for real time calculations of water usage and requirements to reduce water usage – which also improves profitability.
When mines exhaust the minerals or metals they are decommissioned, and this has often caused environmental damage. New approaches to mine decommissioning include considerations for soil recovery and the planting of trees.
Miners are planting energy crops on mining land that has been rehabilitated using organic wastes – the land can then produce biofuels which contribute to power requirements. Regulations are also now moving to a requirement around mine decommissioning so that miners can plan, and communities can set their expectations.
from visual capitalist
Rohitesh Dhawan from ICMM was recently in Brazil and reported on the remediation work of Hydro’s mine at Paragominas “Once the bauxite is harvested, the resulting ‘hole’ is built back up with natural material. ..Not only does it ensure that mined land is restored with the same naturally occurring material, it all but eliminates the need for traditional tailings dams…The result, which I was able to see, smell, taste, and touch for myself, is forests thriving on mined land which are virtually indistinguishable from those that hadn’t been disturbed by mining”.
According to Dhawan “Hydro’s Paragominas mine represents the next best outcome; responsible mining, in harmony with nature and people.”
Brazil has not always had a great history with respect to mining operations. In 2019, The Córrego do Feijão tailings dam collapsed, unleashing a toxic mudflow of around 12 million cubic metres of tailings, eventually killing 270 people. Communities up to 120 kilometres away were impacted by pollution. This led to the founding of the independent Global Tailings Management Institute (GTMI) to manage the implementation and enforcement of the Global Industry Standard on Tailings Management (GISTM).
The mining operations phase is also being transformed with the use of renewable energy, electric vehicles, monitoring and benchmarking of emission levels, improved mining and recover processes and efficient dust suppression procedures. Smart dust dosing units such as those provided by Global Road Technology make the most of polymer and technology to reduce water use and capture critical data.
The new focus for 2024 and beyond for investors and stakeholders in mining will be reducing Scope 3 emissions – those created by the buyer of the mine’s products and not the miners directly. Although these emissions are out of control of the miner (such as battery cell production or lithium hydroxide processing) they account for significantly more greenhouse gas emissions than direct mining. Some of ways mining companies can help drive down Scope 3 emissions include forming joint ventures and R&D partnerships with downstream partners innovating on low carbon processes.
Back to Brazil, where two lithium companies are focused on green and sustainable mining and lithium processing.
Sigma Lithium (NASDAQ: SGML) expects to produce over 250,000 tonnes of 5.5% green lithium concentrate – or what they term “Triple Green Lithium” during its first phase of operations.
The company has pioneered zero tailings strategy driven by investments in clean technologies. Any tailings remaining are on-sold to a third-party processor. The Companies Triple Green Lithium claim is based on net zero carbon emissions (through use of 100% green power and 100% water recycling), zero tailings dams and zero use of hazardous chemicals.
from Sigma Lithium website
Atlas Lithium (NASDAQ: ATLX) also based in Brazil’s lithium valley has one of the largest exploration portfolios for battery metals and minerals in Brazil. The company is fully funded for first phase of operations to produce 150,000 tonnes per annum of battery grade lithium spodumene concentrate with production expected to commence in Q4 2024.
Atlas Lithium has focused on developing relationships with the local communities within the Minas Gerais region and has already planted over 6,000 trees of diverse types. The Company is committed to assisting and nurturing the local population of Vale do Jequitinhonha.
Atlas Lithium’s extraction and processing is targeted to use majority of renewable energy with a 100% dry process using Dense Media Separation (DMS) Technology with 100% dry-stacked tailings and no tailings dams. Recycled water will be used extensively utilising a concentration process with no hazardous chemicals used throughout the entire cycle.
Dense Media Separation (DMS) uses technology to stack tailings from the production process rather than use a tailings dam. This is a non-hazardous method and allows for ease of removal from site for sale or further processing of the tailings.
Atlas lithium properties in Brazil
There is a lot of upside for Brazil in seeing mining companies adopt green practices and help the local communities. Jequitinhonha Valley is one of Brazil’s most impoverished regions. Brazil’s Mines and Energy minister, Alexandre Silveira, has been quoted as saying that lithium mining will assist remake the region into a “valley of opportunity”.
A recent report from Accenture noted “mining companies have a great opportunity to contribute directly to the green energy transition, by providing many of the raw materials at the top of the value chain – copper, lithium, cobalt, and nickel. Whats more if they produce these materials with a low carbon footprint, they will likely to be able to charge a premium”.
The mining industry is playing a crucial role in the energy transition from renewables to a more sustainable energy future. Green mining is good for the environment, society, local communities and for mining companies – sustainable mining practices reduce direct costs and increase access to capital.