Is the green premium a mirage?

Mark Fellows spoke to Kitco Mining at PDAC 2024 in Toronto, Canada, to address the key challenges arising amidst the electrification push.

Scope 1 and Scope 2 Emissions Achievements in Mining:

Mining operations have primarily addressed Scope 2 emissions, related to purchased energy and electricity, with some transitioning to renewable power sources. This has led to significant reductions in carbon emissions, particularly among copper miners in Chile.

Miners Missing Net-Zero Commitments:

Despite setting net-zero emission targets for 2040 or 2050, many mining companies are likely to fall short of the targets due to the slower pace of decarbonisation efforts vs metal demand increases.

No Market Reward for Net Carbon Reductions:

Despite ongoing efforts to reduce carbon emissions, the mining sector lacks market recognition or premium for “greener” metals.

Nickel Sulphide Being Priced Out of Markets by Dirtier Nickel:

Clean nickel producers, particularly those using sulphide/pyromet methods with lower carbon intensities, are losing market competitiveness as cheaper, higher carbon, sources notably from Indonesia, hit the market. Arguably this highlights the market's preference for low-cost production over environmental considerations.

Long Supply Chains for Hard Rock Lithium Mines:

Hard rock lithium mines in Africa and North America ship their intermediate products to China for refining, increasing the carbon intensity of hard rock lithium production versus brines. This raises concerns about consumers inadvertently purchasing high carbon metals, negating the environmental benefits of the energy transition.