Could metal produced in Finland be the most attractive option?
End user expectations drive the mining sector to become more responsible, Eeva Ruokonen writes in our blog.
Eeva Ruokonen, Board member, Finnish Minerals Group
Did you know that a typical electric car requires six times more minerals than a conventional car? Or that an offshore wind farm requires thirteen times as many minerals as a conventional power plant of a similar size?
Our society is facing a challenging situation. The global transition to a low-carbon society is transforming energy and transport systems and causing a high demand for minerals and metals. As a result, the deployment of clean technologies is accelerating as countries that produce around 70 per cent of greenhouse gas emissions have already committed themselves to carbon neutrality. The European Union has set an ambitious goal and aims to become carbon neutral by 2050.
Achieving the climate goal requires a significant amount of metals and minerals, leading to a huge increase in demand. The amount of lithium needed for electric car batteries will increase 42-fold over the next 20 years, while the need for cobalt and nickel will increase 21-fold and 19-fold, respectively – just to give you an example.
In order to achieve our goal of a low-carbon society, we are moving towards mineral-intensive production of energy. At the same time, there is geographic concentration of the mining and processing of many minerals, such as lithium, cobalt and certain rare earth elements. It would be important for the EU to have these minerals produced and further processed within its territory.
New times ahead for the mining industry
The growing demand for metals and minerals creates opportunities for the mining industry: new mines and more production and talent are needed. At the same time, the end users of metals and minerals are calling for a responsible supply chain of metals. They are not only calling for high quality mining products, but for the responsibility of metals production to be evaluated based on the ESG factors, i.e. environmental, social and governance. Blockchain technology for mineral traceability is being developed at a fast pace, and soon product end users will be able to make purchase decisions based on where and how the metals were produced.
This is an interesting situation, and new times are certainly ahead for the mining industry. According to a recent study, the Finnish mining industry estimates that end-users and customers have the least influence on the environmental aspects of mines. However, this is changing rapidly now, and ESG evaluation is a way for mines to identify their strengths – and their weaknesses.
Electrification is a step towards carbon neutrality
Mines need to do more than produce metals and minerals for the needs of a low-carbon society. The metal and mining industry must reduce the emissions it generates and explain how it plans to take action to achieve the goal of carbon neutrality. Those who are pioneers have already done so as major global mining companies have announced that they have started a fossil fuel phase-out through electrification and automation. These companies are taking advantage of the changing operating environment to differentiate themselves from competitors. This is smart leadership.
The pioneering attitude of mining companies operating in Finland puts our mining industry right at the heels of these companies. It would be great if metal produced in Finland was the most attractive option for end users, based on an ESG evaluation.
Member of the Board