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ICMM offers up Scope 3 emission goal setting advice

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ICMM has published guidance to support mining and metals companies to set impactful short-, medium- and long-term targets for reducing their Scope 3 emissions.

The Scope 3 Emissions Target Setting Guidance underscores the importance of transparency and engagement with suppliers, customers, investors and regulators in setting targets, to help accelerate emissions reduction throughout the value chain, it said.

Scope 3 emissions are a critical area of focus for the mining and metals industry, representing up to 95% of a company’s total emissions, compared with 75% across other sectors, according to reports.

This guidance defines target-setting principles tailored to the specific considerations of the mining and metals sector, and is drawn from current EU, US, UK, Canadian and Australian regulatory frameworks, as well as guidance from the United Nations’ High Level Expert Group on Net Zero Emissions Commitments of Non-State Entities. Acknowledging the inherent differences in commodities and value chains, rather than endorsing a specific methodology, it provides mining and metals-specific context around commonly used approaches.

The guidance establishes a robust framework for companies to enhance their targets as their capabilities mature over time, ICMM says. It sets out leading practice across four maturity stages, with each stage outlining minimum expectations across five key dimensions: accounting and reporting, identification of emissions ‘hotspots’, business integration and alignment, assessment of decarbonisation pathways and organisational governance.

Rohitesh Dhawan, CEO, ICMM, said: “As the discussions at COP28 have made clear, each sector bears the responsibility to understand its part in the broader system and extend beyond immediate boundaries to unearth solutions to stubborn sources of emissions. As the base products in almost every industry – from renewable energy and sustainable transport, to construction and tech – metals and minerals are critical to advancing the Sustainable Development Goals and meeting the goals of the Paris Agreement.

“ICMM’s Scope 3 Emissions Target Setting Guidance underscores ICMM members’ dedication to thoroughly understanding their value chain emissions and their capacity to influence change. Collaborating with customers, suppliers, investors and regulators, ICMM members aim to curtail emissions in line with global climate goals. We urge all mining and metals companies to embrace this guidance and set their own targets for reducing Scope 3 emissions.”

Iván Arriagada, CEO, Antofagasta plc, Chair of ICMM and member of ICMM’s Council Climate Change Advisory Group, added: “At Antofagasta, our commitment to addressing climate change permeates every aspect of our strategy and decision making. The introduction of ICMM’s Scope 3 Emissions Target Setting Guidance is an important step in enhancing transparency and catalysing collaborative efforts across the industry to curb these emissions.

“Tackling Scope 3 emissions requires a distinct approach from operational emissions directly or indirectly generated at sites. Setting targets within mining and metal value chains is a complex process, demanding a shift from direct emissions management to collaborative and integrated engagement. This involves building strong relationships with suppliers and customers, even within intricate supply chains.”

In 2021, ICMM members committed to achieve net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement. They also committed to report on Scope 3 emissions and set reduction targets by end-2023 or as soon as possible. Significant progress has been made towards these commitments, and members remain focused on meeting their short and medium-term milestones, ICMM says.

In September 2023, ICMM published Scope 3 Emissions Accounting and Reporting Guidance, establishing a standardised framework for mining and metals companies to calculate and disclose their value chain emissions. This new Target Setting Guidance builds on these accounting and reporting principles.

ICMM publishes Scope 3 guidance to help drive value chain emission reduction partnerships

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Today, the ICMM has published its Scope 3 Emissions Accounting and Reporting Guidance that, it says, provides a standardised framework for mining and metals companies to calculate and disclose their value chain emissions.

The guidance aims to improve transparency and accelerate collaborative action with suppliers and customers on reducing these emissions, the ICMM says. It is based on the most widely used standard for accounting and reporting corporate greenhouse gas (GHG) emissions globally – the GHG Protocol Scope 3 Standard from the World Resources Institute and World Business Council for Sustainable Development – and tailored to the unique characteristics of the mining and metals industry.

Scope 3 emissions represent 75% of the emissions profile of a company, on average – which can extend to 95% for mining and metals companies depending on their commodity portfolio, the ICMM says. As minerals and metals are the foundation of so many industries, this creates a particularly complex profile of Scope 3 emissions for the mining and metals sector, with significant variance across commodities and geographies. The guidance, the ICMM says, helps companies to understand their unique emissions profiles and identify ‘hotspots’ where they can target efforts in partnership with suppliers and customers to achieve meaningful emission reductions.

It sets clear parameters for calculating emissions across the 15 categories of Scope 3 emissions in the GHG Protocol, and supports companies in applying the protocol’s principles of Relevance, Completeness, Transparency, Accuracy and Consistency.

Rohitesh Dhawan, CEO of the ICMM, said: “The goals of the Paris Agreement depend on a massive increase in the use of low-carbon technologies and the essential minerals that enable them. But production of these materials is not without its own carbon footprint. Since all action on Scope 3 emissions depends on good quality calculations and reporting, this needs special focus for the mining and metals industry.

“ICMM members – who represent one third of the industry – have embraced their role in supporting customers and suppliers with their own efforts to decarbonise. And, while transparency and action begin with us, the urgent progress required will need collaboration at a scale we’ve never seen before. We hope that ICMM’s Scope 3 Emissions Accounting and Reporting Guidance drives partnerships that can significantly reduce value chain emissions in line with global climate goals.”

The guidance was developed with support from experts on Scope 3 from ICMM’s membership, and in consultation with investors and standard owners.

Jakob Stausholm, Chief Executive, Rio Tinto, and Chair of the ICMM Council’s Climate Change Advisory Group, said: “Climate change is the key challenge of our generation. ICMM’s Scope 3 Emissions Accounting and Reporting Guidance will help to improve the understanding of mining and metals companies’ Scope 3 emissions profiles, as well as provide opportunities to accelerate emissions reduction.

“Each company is on their own Scope 3 journey, and so the guidance recognises that a ‘one-size-fits-all’ approach does not work in the accounting and reporting of Scope 3 emissions, and that there is a need to accommodate different levels of calculation and reporting maturity across the industry. This guidance can be used by any mining operation, regardless of commodity or geography, and so we call on all companies to adopt its use in their own accounting and reporting of Scope 3 emissions to help improve alignment in disclosures across the industry.”

In 2021, ICMM members committed to reach net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement, as well as report on Scope 3 emissions by the end of 2023 and set reduction targets, if not by then, as soon as possible. Important progress has been made towards all aspects of these commitments, and members remain on track to meet their short and medium-term milestones, according to the ICMM.

The Weir Group’s latest GHG emission reduction targets win SBTi approval

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The Weir Group PLC has had its new, more ambitious emissions reduction targets approved by the Science Based Targets initiative (SBTi).

The targets, announced back in July 2022, cover greenhouse gas (GHG) emissions from Weir’s own operations (Scope 1 & 2) and value chains (Scope 3).

Its SBTi approved near-term science-based emissions reduction targets are to:

  • Reduce absolute Scope 1 & 2 GHG emissions by 30% by 2030 from a 2019 base year; and
  • Reduce absolute Scope 3 GHG emissions from use of sold products by 15% within the same timeframe.

The company said: “We believe that challenging ourselves to further reduce emissions from our own operations and in our wider value chain is right for the world and for our business. We have a responsibility to minimise carbon emissions to help protect the future of the planet, aligned with our purpose to enable the sustainable and efficient delivery of the natural resources essential to create a better future for the world.”

Weir Group says it has already made good progress towards its targets, having reduced its Scope 1 & 2 GHG emissions by a cumulative 17% since 2019. In the company’s broader value chain, the overwhelming majority, 97%, of Weir Group’s Scope 1, 2 & 3 combined footprint is attributable to the use phase of its long-lifespan products and solutions on customer sites. These are, in turn, considered its customers’ Scope 1 & 2 emissions, which make for a shared goal to reduce that footprint. Weir Group says its latest technologies are already offering customers energy savings of up to 40%.

Weir’s technology and R&D roadmap is focused on five key themes, with voice of customer at its core: Move less rock; Use less energy; Use water wisely; Create less waste; and Boost with digital. Further innovation to reduce energy consumption per tonne of ore processed will help reduce emissions from mining even further.

Jon Stanton, CEO of the Weir Group, said: “The world is not moving fast enough to avoid the consequences of climate change. We know the crucial role of metals in low-carbon technologies which is why accelerated, collective action is needed to transform the way metals are mined and produced. Mining needs to scale up and clean up, and Weir’s engineered solutions have an important role to play in achieving that. The approval by SBTi of our near-term science-based greenhouse gas reductions targets reinforces our commitment to make mining smart, efficient and sustainable.”

Weir Group commits to more ambitious Scope 1, 2 and 3 emission goals

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The Weir Group says it has submitted new, more ambitious Scope 1, 2 and 3 emissions reduction targets to the Science Based Targets Initiative (SBTi) for validation.

The move, which follows its commitment, in December 2021, to set SBTi targets, could see the company include absolute reductions in Scope 1 and 2 emissions of 30% and Scope 3 emissions of 15% by 2030, versus a 2019 baseline.

Weir Group explained: “The targets are more ambitious than our previous goals, set in 2020, in two ways:

  • “Switching from an intensity to an absolute emissions reduction basis will drive deeper cuts in Scope 1 and 2 emissions; and
  • “The new Scope 3 commitment adds targets for emissions in Weir’s upstream and downstream value chain for the first time.”

These new targets will make a significant contribution to decarbonising the mining industry, according to Weir. Delivering them would mean that, in 2030, an annual reduction of circa 4.2 Mt CO2e is achieved, equivalent to the annual CO2 emissions of almost 1 million petrol cars.

Weir is focused on developing engineered solutions for smarter, more efficient and sustainable mining, providing customers with new value-adding technologies for use in the most energy intensive processes in the mine, it says.

“With 97% of our total emissions falling within Scope 3, over the lifetime of our products in use, we recognise that our biggest contribution to decarbonising mining will come from delivering sustainable solutions to accompany the industry’s transition to low-carbon energy sources,” the company said.

“The mining industry is critical to the global energy transition as it extracts the raw materials needed to implement new, greener technologies. However, it is energy intensive and so has to meet this increasing demand while delivering on its own environmental commitments. Therefore, it is imperative that we actively partner with customers and others across the industry to drive the broader energy transition required.”

Jon Stanton, Weir Group CEO, said: “These new, more ambitious targets mark another important step in our strategy and strengthen our commitment to further reduce emissions from our own operations and in our wider value chain. Weir’s products and solutions already have a positive impact on the energy efficiency of our customers’ operations, but we recognise that more needs to be done. Our customers are pushing us to innovate lower carbon, more energy efficient solutions and we are stepping up to this. We continue to push boundaries at pace to develop smarter, more efficient and more sustainable solutions for the global mining industry that will enable the delivery of the natural resources essential to create a better future for the world.”

BHP achieves shipping first as it extends funding for steelmaking decarbonisation

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BHP has welcomed the arrival of MV Mt. Tourmaline – the world’s first LNG-fuelled Newcastlemax bulk carrier – that will transport iron ore between Western Australia and Asia from 2022.

The mining company has chartered five LNG-fuelled Newcastlemax bulk carriers from Eastern Pacific Shipping (EPS) for five years and awarded the LNG fuel contract to Shell.

On her maiden voyage, the vessel arrived at Jurong Port in Singapore for her first LNG bunkering operation (the process of fuelling ships with LNG) which will take place through the first LNG bunker vessel in Singapore, the FueLNG Bellina. FueLNG, a joint venture between Shell Eastern Petroleum and Keppel Offshore & Marine, operates the bunker vessel.

After LNG bunkering, the 209,000-deadweight tonne vessel will leave for Port Hedland in Western Australia for iron ore loading operations.

BHP Chief Commercial Officer, Vandita Pant, said: “BHP works with our suppliers to embed innovative and sustainable solutions in our supply chain. This vessel delivers significant improvements to energy efficiency and emissions intensity, as well as reduced overall GHG emissions in our value chain. These achievements demonstrate BHP, EPS and Shell’s shared commitment to social value through innovative emissions reduction initiatives.

“These LNG-fuelled vessels are expected to reduce GHG emissions intensity by more than 30% on a per voyage basis compared to a conventional fuelled voyage and will contribute towards our 2030 goal to support 40% emissions intensity reduction of BHP-chartered shipping of our products.”

EPS CEO, Cyril Ducau, said: “Today’s historic LNG bunkering is further evidence that the industry’s energy transition is in full swing. These dual-fuel LNG Newcastlemax vessels are a world’s first, but more importantly, they represent a culture shift in shipping and mining.”

In a separate announcement, BHP confirmed it would extend its partnership with the Centre for Ironmaking Materials Research (CIMR) at the University of Newcastle with a further A$10 million ($7 million) in funding to support ongoing research into decarbonising steelmaking.

The expanded research program will focus on low carbon iron and steelmaking using BHP’s iron ore and metallurgical coal, including conventional blast furnace ironmaking with the addition of hydrogen, and emerging alternative low carbon ironmaking technologies.

The collaboration, with funding from BHP’s $400 million Climate Investment Program, will last five years and help train the next generation of PhD researchers and engineers.

Dr Rod Dukino, BHP VP Sales & Marketing Iron Ore, said: “Greenhouse gas emissions from steelmaking represent around 7-10% of global total estimated emissions and the industry remains one of the most difficult sectors in the world to abate. Research and innovation have a critical role to play in accelerating the industry’s transition to a low carbon future.

“The expanded research program with the University of Newcastle complements BHP’s existing partnerships with our key steelmaking customers in China, Japan and South Korea. We are pursuing the long-term goal of net zero Scope 3 greenhouse gas emissions by 20501. Recognising the particular challenge of a net zero pathway for this hard-to-abate sector, we are continuing to partner with customers and others in the steel value chain to seek to accelerate the transition to carbon neutral steelmaking.”

Orica addresses Scope 1, 2 and 3 emissions in latest GHG reduction pledge

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Orica has announced its ambition to achieve net zero emissions by 2050, covering Scope 1 and 2 greenhouse gas (GHG) emissions and its most “material” Scope 3 GHG emission sources.

The ambition builds on Orica’s previously announced medium-term target to reduce Scope 1 and 2 operational emissions by at least 40% by 2030.

To advance its net zero emissions ambition, Orica says it will:

  • Continue to reduce its operational footprint: prioritising Scope 1 and 2 operational emissions reductions by deploying tertiary catalyst abatement technology, sourcing renewable energy and optimising energy efficiency and industrial processes;
  • Collaborate with its suppliers: as new and emerging technologies scale and become commercial, partner with suppliers to source lower emissions intensity ammonium nitrate (AN) and ammonia to reduce Orica’s Scope 3 emissions, which account for approximately 70% of Orica’s total Scope 3 emissions;
  • Prioritise lower carbon solutions: developing lower carbon AN, as well as new products, services and technology offerings to help customers achieve their own sustainability goals; and
  • Report progress: transparently disclose performance consistent with the recommendations of the Task Force on Climate-Related Financial Disclosure.

Orica Managing Director and Chief Executive Officer, Sanjeev Gandhi, said: “Our ambition of net zero emissions by 2050 shows our commitment to playing a part in achieving the goals of the Paris Agreement. This is a strong signal that the decarbonisation of Orica will, and must, continue beyond 2030 and requires a collaborative approach across all of our stakeholders.

“We’re making solid progress having already achieved a 9% emissions reduction in financial year 2020 (to June 30, 2020) and further reductions this financial year. We’ve taken our 2030 medium-term target and extended our planning over the long term, developing a credible roadmap to support our ambition to achieve net zero emissions by 2050.

“Over the next decade, Orica is deploying tertiary catalyst abatement, prioritising renewable energy opportunities and supporting a trial of carbon capture utilisation and storage technology. Beyond 2030, how we achieve our ambition is dependent on effective global policy frameworks, supportive regulation and financial incentives, and access to new and emerging technologies operating at commercial scale.

“Orica is a company with a long history of technical innovation which is already helping our customers improve mine site safety, productivity and efficiency. We will apply the same approach by deploying low-emissions technologies to our major manufacturing sites and working with our global suppliers and stakeholders on reducing the footprint of our supply chain.”

Orica says it has already undertaken several initiatives to drive action towards its medium-term target and support its 2050 net zero emissions ambition.

In FY2020, Orica’s Bontang AN manufacturing facility in Indonesia recorded a 43% reduction in net emissions and its Kooragang Island nitrates manufacturing plant (pictured below) in Australia achieved a 6.3% reduction in net emissions, by replacing and improving the performance of selective catalyst abatement technologies, the company said.

In partnership with the Alberta Government this year, Orica’s Carseland AN manufacturing facility in Canada has commissioned tertiary catalyst abatement technology, reducing emissions by approximately 83,000 t/y of CO2e.

Orica has assigned approximately A$45 million ($33 million) over the next five years in capital to deploy similar tertiary abatement technology across its Australian AN sites, which, it says, could deliver an annual reduction of 750,000 t CO2e.

Orica will also support the construction of a mobile demonstration plant of carbon capture, utilisation and storage technology at its Kooragang Island manufacturing facility, led by Mineral Carbonation International, in partnership with the Australian Government and the University of Newcastle. The plant is scheduled to be built on Orica’s Kooragang Island site by the end of 2023 and have direct access to some 250,000 t of captured CO2 from Orica’s manufacturing operations.

ERM on executing the mining sector’s sustainability strategies

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With sustainability close to the number one topic shaping the business landscape, the mining industry faces perhaps more scrutiny today than ever before. From stakeholder engagement to employee welfare and the emissions generated from using mined commodities, there is a spectrum of issues on which mining companies are judged. Not just by traditional critics such as NGOs, but increasingly by policymakers, investors and consumers themselves.

As a result, mining companies are seeking the advice of consultants that live and breathe environmental, social and governance (ESG) issues to adapt to this evolving backdrop (see the mining consultants focus in IM October 2021 for more on this).

In this regard, they don’t come much bigger than ERM, which calls itself the largest global pure play sustainability consultancy. With a remit that goes into strategic, operational and tactical challenges, the company’s services have been in serious demand of late.

Louise Pearce, ERM Global Mining Lead; Jonathan Molyneux, ERM Mining ESG Strategy Lead; Peter Rawlings, Low Carbon Economy Transition Lead; and Geraint Bowden, Regional Client Director – Mining, were happy to go into some detail about how the company is serving the industry across multiple disciplines.

In demand

According to the four, there is increasing demand for services from miners interested in energy/battery minerals (lithium, cobalt, nickel, copper, platinum, palladium and rhodium (PGMs)) on the back of rising numbers of new mines coming onto the scene, “shorter supply chains to customers”, the perceived need to secure domestic supply of these minerals, and requirements of “evidence of responsibly-produced certifications from industry organisations such as the Initiative for Responsible Mining Assurance (IRMA)”.

Such trends have been underwritten by a shift in both the requirements and considerations around the extraction of these minerals, according to Molyneux.

“In the last five to seven years, the main ESG incentives for change have come from access to capital (ie investor ESG preferences, especially in relation to catastrophic incidents),” he said.

“Over the last three years, we have seen a strong rise in expectations from downstream customers, particularly leading brands.”

Jonathan Molyneux, ERM Mining ESG Strategy Lead

Automotive original equipment manufacturers like BMW and Daimler are placing sustainability at the centre of their brands, according to ERM. Their initial focus has been on ‘net-zero’ driving/electrification – and they have made progress on this with several major electric car launches. They then shifted to examining the carbon emissions and ESG, or responsible practices, of tier-one and tier-two component manufacturers. The last step has been a full analysis of the ESG credentials of input materials right back to source, ie the mine.

“We see a shift from the historic lens of customers managing supply risk by sourcing from organisations which ‘do little/no harm’ (eg human rights compliance, catastrophic incident avoidance) to supply partners that can contribute to the ‘do net good’ or ‘create value for all stakeholders’ (ie communities, workforce, nature positive),” Pearce said.

Such a shift has resulted in more clients considering “circular thinking” in their operational strategy, as well as carrying out risk reviews and transformation projects focused on a company’s social or cultural heritage. Tied to this, these same companies have been evaluating their water use, biodiversity requirements and, of course, decarbonisation efforts.

It is the latter on which the steel raw materials companies predominantly have been looking for advice, according to ERM.

The focus has been on ‘green’ iron ore, low-carbon steel and ‘circular’ steel, according to Molyneux and Bowden, with ERM providing input on how companies in this supply chain can integrate sustainability into their strategy and operations.

On the thermal coal side, meanwhile, it is a very different type of ERM service in demand: mine retirements, closure/local/regional regeneration transitions and responsible disposals.

Delivering on decarbonisation

The mining industry decarbonisation targets have come thick and fast in the last 18-24 months, with the latest announcement from the International Council on Mining and Metals (ICMM) seeing all 28 mining and metals members sign up to a goal of net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement.

Many have gone further than Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company) emissions, looking at including Scope 3 (all other indirect emissions that occur in a company’s value chain) targets.

Fortescue Metals Group, this month, announced what it said is an industry-leading target to achieve net zero Scope 3 emissions by 2040, for example.

These are essential goals – and ones that all interested parties are calling for – in order to deliver on the Paris Agreement, yet many miners are not yet in the position to deliver on them, according to Pearce, Molyneux, Rawlings and Bowden.

“Miners need to look at decarbonisation at a holistic level across their operations and value chain, and cannot just delegate the net zero requirements to individual assets,” Rawlings said. “The solutions needed require investment and are often at a scale well beyond individual assets/sites.”

Much of this decarbonisation effort mirrors other industries, with the use of alternative fuels for plant and equipment, accessing renewable electricity supplies, etc, they said.

Process-specific activities can present challenges and is where innovation is required.

“These hard to abate areas are where a lot of efforts are currently focused,” Rawlings said.

Tied into this discussion is the allowance and estimates made for carbon.

There has been anecdotal evidence of miners taking account of carbon in annual and technical reports – a recent standout example being OZ Minerals inclusion of a carbon price in determining the valuation of its Prominent Hill shaft expansion project in South Australia – but there is no current legislation in place.

“We are seeing a broad spectrum of price and sophistication (targeted audience, knowledge level), but it is an active board level discussion for most clients,” Bowden said on this subject. “Most clients view this as market-driven requirements as opposed to a voluntary disclosure.”

This has been driven, in part, from the recommendations of the Task Force on Climate-Related Financial Disclosures, which many miners – including all the majors – are aligning their reporting with.

Some clients are also looking into scenarios to work around carbon regimes such as the Carbon Border Adjustment Mechanism, which proposes a carbon-based levy on imports of specific products.

Having acquired several companies in recent months focused on the low carbon economy transition – such as E4tech, Element Energy and RCG – ERM feels best placed to provide the technical expertise and experience to deliver the sustainable energy solutions miners require to decarbonise their operations.

“With these companies, combined with ERM’s expertise, it means we can support clients on the decarbonisation journeys from the initial strategy and ambition development through to implementation and delivery of their roadmaps,” Rawlings said. “We can support clients from boots to boardroom as they assess decarbonisation options and technologies; help them understand the financial, policy and practical aspects linked to deployment of solutions; and access the financing necessary to support deployment.”

ESG dilemmas

There is more to this evolving backdrop than setting and meeting ambitious environmental goals, yet, in ERM’s experience, the advice provided by consultants – and requested by miners – has historically been focused on individual ESG domains.

“This has often been driven by their realisation that their (miner’s) in-house policies and standards require updating,” Pearce said.

Louise Pearce, ERM Global Mining Lead

A siloed or disaggregated approach to ESG strategy development often reduces risk, but rarely generates value for the enterprise at hand, according to Pearce.

“What we have learned is that in order for organisations to create value, they need to focus on value drivers for the corporation,” she said. “These value levers are typically influenced by an integrated suite of ESG dimensions. For example, this could be looking at carbon emissions, connected with water use and nature, connected with local socio-economic development.”

“Sustainability and ESG are about understanding the inter-relationships between our social, natural and economic environments over the longer term. It cannot be about addressing one topic at a time or responding to the loudest voices.”

This is where ERM’s ‘second-generation’ ESG advice, which is driven by data and opportunities to create value as well as manage risk, is fit for the task.

“We are also finding that, at its heart, the central issue to second-generation ESG performance delivery/improvement for our clients is not just the strategy, but a willingness of organisations to reflect on their core values, how these have driven their traditional approaches and decisions and how they will need to evolve these if they want to achieve a genuine brand and reputation for ESG and achieve impact on the value drivers they have selected,” she added.

Such thinking is proving definitive in ERM’s mining sector mergers and acquisition due diligence.

“We have multiple experiences where clients have asked us to carry out an ESG review of a target portfolio, only to find that there is too great a gap between the target’s ESG asset footprint to align them with the client’s standard – or, that the carbon, water, closure or tailings profile of the target carries a too high-risk profile,” Molyneux said.

This is presenting clients with a dilemma as they want to increase their exposure to certain minerals, but are, in some instances, finding M&A is a too high-risk route. At the same time, the lead time to find and develop their own new assets is longer than they would wish for building market share.

Such a market dynamic opens the door for juniors looking for assets early in their lifecycles, yet it places a high load on the management teams of these companies to think strategically about the ESG profile of the asset they are setting the foundations for to eventually appeal to a potential acquirer.

“This is, in itself, a dilemma because, typically, the cash scarcity at the junior stage leads management teams to focus on the immediate technical challenges, sometimes at the cost of also addressing the priority non-technical challenges,” Bowden said.

Those companies who can take a strategic view on the ESG requirements of the future – rooted in a deep understanding of how to deliver change on the ground – will be best placed in such a market, and ERM says it is on hand to provide the tools to develop such an appropriate approach.

(Lead photo credit: @Talaat Bakri, ERM)

Fortescue issues ‘industry-leading’ Scope 3 emissions targets

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Fortescue Metals Group has announced what it says is an industry-leading target to achieve net zero Scope 3 emissions by 2040, addressing emissions across Fortescue’s entire global value chain, including crude steel manufacturing which accounts for 98% of the company’s Scope 3 emissions.

Fortescue’s approach to reducing Scope 3 emissions is to develop projects and technologies with a focus on reducing emissions from iron and steel making and to work with current and prospective customers on the application of the technology and the supply of green hydrogen and ammonia from Fortescue Future Industries (FFI). Fortescue will also prioritise the decarbonisation of its own fleet of eight ore carriers and engage with shipping partners to reduce, and aiming to eliminate, emissions from shipping.

FFI is targeting the production of 15 Mt of green hydrogen annually by 2030, which will underpin opportunities to work with customers and shipping partners on emissions reduction and elimination projects.

In addition to the long-term goal to achieve net zero Scope 3 emissions by 2040, the following medium-term targets have been set:

  • Enable a reduction in emissions intensity levels from the shipping of Fortescue’s ores by 50% by 2030 from financial year (FY) 2021 levels; and
  • Enable a reduction in emissions intensity levels from steel making by Fortescue’s customers of 7.5% by 2030 from FY21 levels, to 100% by 2040.

Fortescue Chief Executive Officer, Elizabeth Gaines, said: “Climate change is the most pressing issue of our generation and at Fortescue, setting stretch targets is at the core of our culture and values and we are proud to set this goal to tackle emissions across our value chain.

“Fortescue has commenced its transition from a pure play iron ore producer to a green renewables and resources company, underpinned by the world’s first major carbon emission heavy industry operation to set a target to achieve carbon neutrality by 2030. This Scope 3 target is consistent with this transition and complements our targets for Scope 1 and 2 emissions reduction.

“Collaboration is integral to driving the rapid transition to green energy, and we remain committed to actively engaging with our customers, suppliers and other key industry participants to facilitate the reduction of emissions. This includes the development of technologies and the supply of green hydrogen and ammonia through FFI, which will provide significant opportunities for the steel, cement and land and sea transport industries to decarbonise.”

To achieve the target, Fortescue and FFI are focused on accelerating a number of key initiatives:

  • Conversion of existing maritime vessels, including Fortescue’s fleet of ore carriers, to be fuelled by green ammonia;
  • Supporting the adoption of green ammonia in new vessel construction;
  • Pursuing opportunities for emissions reduction and elimination in iron and steel making, facilitated by the use of renewable energy and green hydrogen; and
  • Research and development work to produce green iron and cement from Fortescue ores at low temperatures without coal.

FFI Chief Executive Officer, Julie Shuttleworth, said: “Our investments in technologies and research and development are focused on demonstrating that the production of iron ore, cement, iron and steel can operate with renewable energy.

“Our work to decarbonise Fortescue’s iron ore operations will position Fortescue as the first major supplier of green iron ore in the world, paving the way for production of green iron and a new green steel industry.”

ICMM members pledge to reach ‘net zero’ by 2050 or sooner

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Members of the International Council on Mining and Metals (ICMM) have committed to a goal of net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 or sooner, in line with the ambitions of the Paris Agreement.

This landmark commitment was made in an open letter signed by the CEOs of ICMM’s company members.

Although the companies within ICMM have individual decarbonisation targets, which in some cases go beyond ICMM’s collective commitment, this represents a joint ambition.

“The rate and nature of the ultimate decline in emissions will vary across the different commodities and geographies represented by our diverse membership,” the ICMM says. “Yet our approach to individually setting and meeting targets will be consistent and include the following, no later than the end of 2023 where these do not already exist:

  • “Setting Scope 1 and 2 targets: we will build clear pathways to achieving net zero Scope 1 and 2 GHG emissions by 2050 or sooner, through meaningful short and/or medium-term target;
  • “Accelerating action on Scope 3 GHG emissions: we recognise that Scope 3 is critical to minimising our overall impact and we will set Scope 3 targets, if not by the end of 2023, as soon as possible. Although all Scope 3 action depends on the combined efforts of producers, suppliers and customers, some commodities face greater technological and collaborative barriers than others. We will play a leading role in overcoming these barriers and advancing partnerships that enable credible target setting and emission reductions across value chains;
  • “Covering all material sources: our targets will cover all material sources of emissions, aligning to the GHG Protocol definition of organisational boundaries and materiality;
  • “Focusing on absolute reductions: for some operations, intensity rather than absolute targets may be more appropriate in the short and medium term. Where intensity targets are used, we will disclose the corresponding absolute increase or decrease in GHG emissions;
  • “Applying robust methodologies: we will use target-setting methodologies that are aligned with the ambitions of the Paris Agreement and disclose in detail the assumptions we use; and
  • “Disclosing openly and transparently: we will report our progress on Scopes 1, 2 and 3 annually, obtain external verification over our performance, and report in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures.”

These commitments are additional to and have been incorporated into an update of ICMM’s Climate Change Position Statement which had several pre-existing commitments on performance and disclosure. Action on climate change is an integral part of ICMM’s Mining Principles, representing the comprehensive commitment to a responsible mining and metals industry, it says.

Rohitesh Dhawan, CEO, ICMM, said: “As the suppliers of the minerals and metals that are critical to decarbonisation and sustainable development, we have a particular responsibility to minimise the impact of our operations on the environment. ICMM members’ collective commitment to net zero Scope 1 and 2 GHG emissions by 2050 is a pivotal moment in our history. We are speaking with one voice, representing approximately one third of the global mining and metals industry – including more than 650 sites in over 50 countries – so that we drive emissions reduction at a significant scale.

“ICMM members have and will continue to set meaningful short and/or medium-term targets to build clear pathways to achieving this goal, while also accelerating action on addressing Scope 3 emissions and enhancing disclosure. We encourage other mining and metals companies, suppliers and customers to join us in decarbonising commodity value chains so that we collectively accelerate climate action in our wider industry.”

Gonzalo Muñoz, UNFCCC High Level Climate Action Champion, added: “I welcome the leadership and joint ambition of ICMM members to commit to a goal of net-zero Scope 1 and 2 GHG emissions by 2050 or sooner, and I strongly encourage companies to set scope 3 GHG emissions reduction targets by the end of 2023. The High-Level Climate Action Champions encourage members to strive to set the most ambitious science-based targets possible in line with the criteria of the Race to Zero campaign.”

OZ Minerals on the road to electrifying Carrapateena mine

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OZ Minerals’ electrification transformation at its Carrapateena copper-gold operation in South Australia has kicked into another gear with a Zero Automotive ZED70 battery-electric light vehicle arriving on site.

The company has made its electrification and sustainability aspirations clear to stakeholders, confirming it is working towards emitting zero Scope 1 emissions and striving to systemically reduce Scope 2 & 3 emissions across its value chain. It also wants to consume and produce in a way that generates zero net waste and creates value for its stakeholders.

In June, a prefeasibility study on an expansion of Carrapateena included a trial of electric light vehicles and establishment of a renewable energy hub.

The precursor to the ZED70 Ti electric light vehicle developed in partnership with Zero Automotive, the ZED70 (pictured) is based on a Toyota Landcruiser 79 Series and uses either NCM (Nickel Cobalt Manganese) or LTO (Lithium Titanate Oxide) battery chemistry.

The vehicle comes with continuous power of 75 kW and peak power of 134 kW, plus 358 Nm of continuous torque. Depending on the selected battery chemistry, the battery capacity comes in at 88 kWh (NCM) or 60 kWh (LTO).

The ZED70 Ti electric light vehicle to be delivered to Carrapateena following the trial of the ZED70 will use LTO chemistry and come equipped with a specially selected battery housing, control systems and charging capability to endure the “hyper saline underground environment” at Carrapateena.

“Working in partnership with Zero Automotive, we recently welcomed the first electric light vehicles onto site, and have the ZED70 Ti model in use underground,” Oliver Glockner, the OZ Minerals lead in developing the ZED70 Ti with Zero Automotive, said. “This is has been well received on site as a significant step in our electrification roadmap towards no diesel particulates underground and no scope 1 emissions on site.”

Dan Taylor, Business Development Manager at Zero Automotive, told IM that OZ Minerals has worked closely with the company in finalising the vehicle requirements and the change management process for implementing a battery-electric vehicle at the mine site.

“Some of the things I am talking about here include:

  • “Regular communications with their team on the progress with the project;
  • “Establishing charging points at the mine;
  • “Organising trial test drive bookings with those employees interested, and collecting performance data and feedback from them;
  • “Testing charging of the vehicle from one of their generators;
  • “Reviews by the emergency services and maintenance teams; and
  • “Planning the site acceptance testing when the OZ Minerals vehicle is delivered.”

Taylor said the LTO batteries the ZED70 Ti is fitted with can travel around 3 million km or endure 20,000 recharges before the battery re-charge ability reduces by 20%. This compares favourably with the 475,000 km, or 1,200 charges, it would take for the NCM battery’s re-charging ability to drop by the same amount.

At the same time as this, the LTO battery system will charge to a 95% charge in three hours on 415 V three-phase power, compared with four-and-a-half hours for the NCM equivalent.

“With DC-DC fast charging you will need 30 mins on the LTO (two hrs for NCM),” Taylor added.

Such benefits outweigh the lower energy density and upfront expense that come with using these LTO batteries, according to Taylor.

In October, OZ Minerals became the first miner in Australia to take delivery of a battery-powered Normet Charmec MC 605 VE SmartDrive (SD) at Carrapateena.