Katharina Cavano l Palladium - Sep 13 2022
As California Phases Out Gas Vehicles, Sustainable Mining Has Never Been More Critical

In late August, California passed a mandate requiring that all new cars and light trucks sold in the state by 2035 be zero-emissions vehicles. In the meantime, 35% of new cars sold by 2026 must produce zero emissions, and by 2030, that requirement leaps up to 68%. Some estimate that this will mean 2.9 million fewer gas-powered cars sold in California by 2030.

Heralded as an important step that many other states are expected to follow, shifting away from gas-powered cars is critical in the United States where transportation is one of the country’s top contributors to greenhouse gas emissions. “This shift towards electric vehicles also signals a major shift in attention towards the mining of critical minerals,” says Erin Leyson, a member of Palladium’s Commercial Facilities for Natural Resources team.

Electric vehicles, of course, require batteries to run – and those batteries are made with metals and minerals that range from lithium and nickel to cobalt and manganese. While the types of minerals required depends on the type of car, the reality remains the same: mining of critical metals must ramp up to support the transition to electric vehicles.

According to data from the International Energy Association, an electric vehicle requires upwards of six times the minerals that a gas-powered car needs. “Because there’s going to be an increase in the need for these minerals, we’ll need to ensure that mines and mining companies can not only keep up with the demand but also do so responsibly and sustainably,” adds Leyson.

The mining industry hasn’t traditionally been known for sustainability, but Leyson says that there’s a massive shift taking place. “From the conversations we’ve had, it’s clear that mining companies not only want to improve their practices but they are actively doing so; following new mandates from organisations like the International Council on Mining and Metals (ICMM) to move towards more sustainable mining operations.”

Many of the necessary metals for batteries are found in what she describes as the “tropical band.” In a recent report published in conjunction with ICMM, the team noted that “the tropic and subtropic countries that are most economically and geographically vulnerable to climate threats, such as Peru, Indonesia, and Chile, are also rich in the critical minerals and metals that will be indispensable to the green economy.”

How, then, can mining companies extract these future-facing metals in a responsible and sustainable way?

Leyson is hopeful. “It will only get more difficult, but if these metals are so precious for our collective transition to a green economy, then we need to be sure that as we ramp up their extraction, we also help the communities around these mines to be resilient to the effects of climate change and all the other changes a mining operation brings with it, such as migration, infrastructure, and environmental stress.”

“There is a way to both protect business interests and also bolster the communities that support the mines to ensure that mining companies can responsibly exit operations and communities that host mines are made better off from having done so,” she explains.

There’s also onus on the vehicle manufacturers that rely on batteries and critical metals to ensure that each step of their value chain is sustainable – and to support mining companies to get there.

“There’s an impetus on the consumer-facing brands to hold mining companies accountable for sustainable and responsible production and to create incentives to do so, such as premium payments for responsibly sourced metals.” And there are options, she adds, noting that organisations like ICMM are guiding mining companies to develop and adopt more sustainable and responsible practices.

“There are risks but there are also huge opportunities here,” Leyson notes. “I can envision that as the sector begins looking into more sustainable options, it’ll put pressure on lawmakers to enhance waste management regulations for lithium-ion batteries, opening avenues for more circular supply chains where recycled metals create a secondary supply of critical battery inputs, reducing the need to ramp up extraction of new metals so quickly, and allowing mining companies and communities to play a productive and positive role in the green economy transition.”

Ultimately, mining must continue and even increase to support a green economy transition. The important part is to coordinate across mining companies, lawmakers, and electric vehicle manufacturers to ensure a sustainable and responsible transition that actually moves the world forward.

For more, read Building a Legacy of Community Resilience in the Mining Industry, or contact info@thepalladiumgroup.com.