May 10, 2021

Low carbon world needs $1.7trn in mining investment

Decarbonisation
battery metals
ESG
Wood Mackenzie
2 min
Mining companies need to invest $1.7trn in the next 15 years to supply enough copper, cobalt, nickel and the metals needed to create a low carbon world

According to a new report from consultancy Wood Mackenzie, mining companies need to invest nearly $1.7trn in the next 15 years to help supply enough copper, cobalt, nickel and other metals needed for the shift to a low carbon world.

Cutting carbon emissions

The United States, Britain, Japan, Canada and others raised their targets on cutting carbon emissions to halt global warming at a summit in April hosted by US President Joe Biden.

Meeting those targets will need large-scale deployment of electric vehicles, storage for power generated from renewables and electricity transmission, all of which require industrial materials, such as lightweight aluminium and metals used in batteries such as cobalt and lithium.

Wood Mackenzie

Wood Mackenzie analyst Julian Kettle calculated miners needed to invest about $1.7trn during the next 15 years to “deliver a two-degree pathway - where the rise in global temperatures since pre-industrial times is limited to 2°C”.

Wood Mackenzie

“At an industry level, there seems to be reticence around investing sufficient capital to develop future supply at the pace and scale demanded by the energy transition (ET),” he said.

Mining firms are wary of making heavy investments after their experience of the last decade when they invested in new capacity just as demand peaked, leading to a collapse in prices and revenues. They also need to please investors, who are unlikely to want to see dividends diverted to capital spending.

ESG

Rising demands of investors related environment, social and governance (ESG) issues further add to the challenge.

Australia, Canada and Western Europe carry a low ESG risk but some of the best resources are in high-risk areas, such as Democratic Republic of Congo, which sits on about half the world’s cobalt reserves according to the U.S. Geological Survey. “Given the need to meet tough decarbonisation and ESG targets, Western governments, lenders, investors and consumers will need to get comfortable operating in jurisdictions where ESG issues are more complex,” Kettle said.

Kettle said government support was needed to help miners comply with ESG issues to ensure production from high-risk areas was conducted in an acceptable way to consumers.

“Then, and only then, will the West be able to secure sufficient volumes of the raw materials needed to pursue the energy transition in the timescales envisaged.”

Digital Solutions

Digital solutions to enhance decarbonisation and support sustainability efforts in heavy industries like mining are being offered by Oren, a B2B marketplace conceived by Shell and IBM, and Axora.

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Jun 17, 2021

People Moves: Peter Cunningham appointed Rio Tinto CFO

Rio Tinto
Peter Cunningham
financial planning
Renewable Energy
2 min
Rio Tinto has appointed Peter Cunningham its Chief Financial Officer and he will also join the Board as an executive director

Rio Tinto has appointed Peter Cunningham as Chief Financial Officer (CFO) with immediate effect. Peter, who has been Interim Chief Financial Officer since 1 January 2021, will also join the Rio Tinto Board as an executive director at the same time.

Peter Cunningham appointed Rio Tinto CFO

Peter Cunningham was previously Group Controller and has held a number of senior financial and non-financial leadership positions across Rio Tinto in Australia and the UK. In a career spanning 28 years with Rio Tinto, he has held roles including Global Head of Health, Safety, Environment & Communities; Head of Energy and Climate Strategy; and Head of Investor Relations.

Prior to joining Rio Tinto, Peter qualified as a chartered accountant.

Rio Tinto CEO Jakob Stausholm commented: “I am delighted to confirm Peter in the role and, having worked closely with him for a number of years, I know he is the ideal person to be our Chief Financial Officer. His detailed knowledge of the company and of the financial and non-financial drivers of our industry will be invaluable as we continue to strengthen Rio Tinto.”

Rio Tinto Chairman Simon Thompson added: "I look forward to Peter joining the Rio Tinto Board and know from experience that his deep understanding of Rio Tinto and commitment to disciplined capital allocation will serve shareholders well and enrich our Board discussions.”

Rio Tinto aiming for net zero by 2050

Rio Tinto is aiming to reach net zero emissions across its operations by 2050. Across the company, it is targeting a 15% reduction in absolute emissions and a 30% reduction in emissions intensity by 2030, from a 2018 baseline.

Aluminium is found in everything from cars to phones. But one of the challenges of producing this essential material responsibly is finding ways to decarbonise the process.

Part of the reason is creating alumina – the main ingredient in aluminium – takes a lot of energy, which in turn creates greenhouse gas emissions. New technologies will be essential to helping reduce emissions, but many haven’t been proven. And some not yet even discovered. Rio Tinto is partnering with the Australian Renewable Energy Agency (ARENA)to develop hydrogen energy options and make a positive step towards these goals.

Rio Tinto Weipa

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