By Andrew van Zyl, SRK Consulting South Africa MD
As Europe plans its way towards a lower-carbon future, there is an awareness that the journey is as important as the end-goal; to responsibly source the minerals it will need for the energy transition, the European Union is working on understanding the impacts of this process across the mining value chain.
Andrew van Zyl, SRK Consulting South Africa MD.. Image credit: SRK Consulting
SRK Consulting is participating in an important initiative on this front – the RE-SOURCING project funded by the European Union’s Horizon 2020 research and innovation programme. This has been working to build a global stakeholder platform for responsible sourcing.
An aspect of this project is to help define standards of responsible sourcing for European Union countries. Importantly, this process is designed to include the input of stakeholders in regions where the minerals are currently being sourced and most likely to be sourced in the future.
Understanding impacts
Sourcing minerals responsibly means understanding the impact of mining and its extensive value chain – from the environmental impact and carbon footprint to the range of social and human rights impacts. The RE-SOURCING initiative is part of the European Green Deal – in which the EU is tackling the growing threat of climate change and environmental degradation. The aim is to ensure that the extensive global sourcing and consumption of raw materials for the ‘green’ transition is based on sound sustainability principles and practices.
The growing focus on human rights in the mining sector is a critical element of the environmental, social and governance (ESG) issues which the industry now includes in its reporting practices.
Mining companies have begun monitoring and addressing the human rights impacts not only of their operations, but in their upstream and downstream supply chain. These practices are based on decades of concern about issues like child labour, slavery and unethical behaviour in the mineral supply chain.
The RE-SOURCING project also links strongly to lenders in the mining sector, as there are minerals like cobalt that are increasingly important to the future of battery and renewable technology. With concerns about human rights in the artisanal mining sectors of countries like the Democratic Republic of Congo – where much of the world’s cobalt is mined – lenders to mining projects need to be fully informed about how mining projects plan to deal with these issues.
With concerns about human rights in the artisanal mining sectors of countries like the Democratic Republic of Congo – where much of the world’s cobalt is mined – lenders to mining projects need to be fully informed about how mining projects plan to deal with these issues. Image credit: SRK Consulting
Definitions and engagement
When developing responsible sourcing standards, the EU’s approach has recognised that such requirements carry a risk of unintended consequences. For this reason, a great deal of time and expertise is being ploughed into establishing some common understanding of responsible sourcing between mineral producers, their Europe-based customers and various other stakeholders.
There is also potential for significant disruption to mineral supply chains starting in Africa, if well-intentioned EU directives about standards were difficult or impossible to comply with – or caused negative unintended results. SRK Consulting’s work has therefore involved input, research and engagement. The RE-SOURCING process aimed to develop wide interest and engagement, to allow organisations to flag possible unintended consequences of future European directives aimed at responsible sourcing – before those directives were applied. This recognises that there are many national standards to which mines already comply, which do not need to be reinvented. These standards have been developed following ongoing, pro-active engagement between stakeholders.
We expect the mining sector to be enthusiastic about participating in RE-SOURCING consultations, as it contributes to risk management strategies, while also being an effective way of providing price support for acting responsibly.
Responsible miners have embraced both the opportunities and challenges of responsible mining. They can only gain from well-considered responsible sourcing standards being evenly applied across the sector to all the players.
Africa is estimated to hold about 30% of the global mineral reserves Africa is estimated to hold about 30% of the global mineral reserves required for the green energy transition, hosting deposits of more than 60 metals and minerals. For certain minerals such as cobalt, the continent contains about 70% of the world’s resources. At the same time, it contributes only a fraction of global carbon dioxide emissions – just 3.8% in 2020.
It is therefore vital that Africa has a voice in how responsible sourcing of these crucial minerals is defined and guided. However, articulating that voice is not easy. Many of the key stakeholders in Africa – such as communities impacted by mining, artisanal miners and collectors of electronic waste – are survival-focused, and do not see themselves as part of a mining value-chain. This is despite the involvement of large numbers of people. For instance, there are about 10 million people involved in artisanal mining in Africa – about half of them being women. The sector is thought to support about 60 million people in total.
SRK Consulting is supporting the EU’s RE-SOURCING initiative by facilitating the input of stakeholders such as mining communities and artisanal miners from around Africa.
RE-SOURCING is an EU-funded multi-stakeholder platform to advance responsible sourcing of raw materials across global mineral value chains. It promotes strategic agenda setting, as well as the coherent application of practices for responsible sourcing.
The initiative is developing roadmaps for three key sectors: renewable energy; mobility; and electric and electronic equipment. The focus is on supporting a sustainable transition based on environmentally friendly, socially equitable and economically profitable sourcing in global mineral value chains.