Climate-Smart Mining

Germany supports World Bank Launch of Climate-Smart Mining Facility

Launch of the Climate Smart Mining Facility

21.05.2019 |

On May 1st, the World Bank has officially launched the Climate-Smart Mining Facility in Washington DC. It is the first-ever fund dedicated to making mining for minerals a more sustainable practice and helps mitigate the effects of climate change. The aim of the facility is to support sustainable extraction and processing of minerals and metals used in clean energy technologies, such as wind, solar power and batteries for energy storage and electric vehicles. While ensuring the mining sector is managed in a way that minimized the environmental and climate footprint, it focuses on helping resource-rich developing countries benefit from the increasing demand for minerals and metals.

The facility evolves out of the World Bank report “The Growing Role of Minerals and Metals for a Low-Carbon Future” which found that a low-carbon future will be significantly more mineral intensive than a ‘business as usual’ scenario. Global demand for strategic minerals like lithium, graphite and nickel will skyrocket by 965%, 383% and 108% respectively by 2050, according to the World Bank’s updated 2018 projections, which are based on the assumption that countries will implement the Paris Agreement. While the growing demand for minerals and metals offers an opportunity for mineral-rich developing countries, it also represents a challenge: without climate-smart mining practices, the negative impacts from mining activities will increase, affecting vulnerable communities and environment.

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The multi-donor trust fund will work with developing countries and emerging economies to implement sustainable and responsible strategies and practices across the mineral value chain. The facility will also assist governments to build a robust policy, regulatory and legal framework that promotes climate-smart mining and creates an enabling environment for private capital. Therefore, the World Bank is targeting a total investment of $50 million, to be deployed over a 5-year timeframe. The fund will focus on activities around four core themes: climate change mitigation; climate change adaptation; reducing material impacts and creating market opportunities, contributing to the decarbonization and reduction of material impacts along the supply chain of critical minerals needed for clean energy technologies.

Mining giants as Rio Tinto and Anglo American have formally committed to support the fund with 1 Million US-Dollar (each). JS Jacques, the CEO of Rio Tinto, justified this step by saying that his company “wants to be seen as part of the solution, not part of the problem”. As business as usual is not an option anymore, the German government has played a leading role in developing the climate-smart mining strategy from the very beginning. Through supporting the World Bank it has developed an approach that is now being adopted by international players.

Building Blocks of the Climate-Smart Mining Strategy

Overview CSM Strategy Building Blocks

Gonzalo Muñoz, High-Level Champion for COP25 of the Government of Chile called for concrete action in his opening speech on May 1st 2019, during the launch of the CSM Facility in Washington: "Let's use COP25 in Santiago to build a 'Climate Smart Mining Coalition' and to announce a binding and ambitious carbon mitigation target for the mining industry“! High-level representatives from potential CSM pilot countries like the Permanent Secretary of the Federal Ministry of Environment of Nigeria and the Minister of Mines and Minerals Development of Zambia were also present. "There are lots of challenges, especially with regard to the increasing digitization of the sector", so Zambias Mines and Minerals Development Minister. With more than 200 participants, the launch of the fund showed not only the importance of but also the interest in a fundamental rethink of the mining sector. “It is a global challenge not only a mining challenge to reach the Paris Agreement”, concluded Seamus French, the CEO of Bulk Commodities from Anglo American.

For further information, please contact Johannes Lohmeyer.

Comic Art Minerals for Climate Action Panel

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