While most industries experienced shutdowns during the pandemic, the mining industry was, apart from some brief pauses, deemed essential in many countries. Mining operations continued during a time of rising mineral prices, leading to high profits.
The top mining companies saw their profits increase by 15% in 2020 from the year before, and in 2021, profits more than doubled. PricewaterhouseCoopers’ (PwC) 2021 annual mining report called 2020 a “banner year” for the mining sector.
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“By any important measure, mining is one of the few industries that emerged from the worst of the COVID-19 economic crisis in excellent financial and operational shape,” said PWC.
Two recent studies investigated the power dynamics between mining companies and local communities in Latin American and European countries during the pandemic. The researchers, from the Coalition Against the Mining Pandemic (a collective of organisations including the Institute for Policy Studies and MiningWatch Canada), found that many governments used both economic recovery and the energy transition as justification to continue mining production, while simultaneously deregulating the industry.
“After being declared ‘essential’ at the beginning of the pandemic by many of the countries in this research, there was further deregulation to facilitate mining operations and, in some places, mining activity gained even more support as an alleged force for economic recovery,” reads the report on Latin American countries. “In some cases, this coincided with the boost that the energy transition is giving to the mining of metals such as copper and lithium.”
Researchers are seeing the same patterns in Europe, where case studies in Turkey, Northern Ireland and Spain reveal that mining companies and governments are connecting economic recovery from the pandemic with the energy transition, promoting mining for the critical minerals needed for the energy transition within Europe’s borders.
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By GlobalDataThe energy transition is mineral intensive
Many governments are keen to secure the supply of critical minerals. The transition from fossil fuel to clean power will see an increased need for certain minerals for technologies such as electric vehicles (EVs), wind turbines, solar panels and batteries. A typical EV will need six times more minerals than a conventional car and an onshore wind plant nine times more minerals than a gas-fired plant, according to the International Energy Agency (IEA). With current projections of demand for some minerals increasing more than twentyfold by 2040, the IEA predicts that with current investments, production will not be able to keep up.
However, Meg Chatterton, author of the report on Europe, is critical of the decision by some governments to keep mines operational during the pandemic.
“Throughout the pandemic, some industries have been granted ‘essential’ status in order to help carry society through crisis,” Chatterton wrote in the report. “Whereas the logic for doing this is clear in the case of, for example, healthcare and transportation, the decision by some European governments to class mining as an essential industry, or to turn a blind eye to their continued operations, is questionable, to say the least.”
Two years ago, some of the same non-profit organisations behind the European and Latin American studies had already warned in another report about the risks of continuing mining activities. According to the report, mining projects had become hotspots for the spread of Covid-19. As an example, they name an outbreak among Kiashke Zaaging Anishinaabek in Canada, an indigenous community of 300 people that saw eight confirmed cases in May 2020. The chief of the community, Wilfred King, told CBC he suspected the outbreak to be connected to either Thunder Bay, a city some 175km south, or to the Lac des Iles Mine, where some of the community members work and that saw a Covid-19 outbreak around the same time. King was critical of the Canadian government’s decision to let the mining operations continue.
A boost to mining
Since the start of the pandemic, the mining sector has been the recipient of deregulatory actions and incentives to mine critical minerals in many countries. In Peru, the government issued a law in July 2021 declaring the exploitation of lithium to be of public necessity and national interest. In Brazil, Environment Minister Ricardo Salles said during a minister’s meeting at the beginning of the pandemic that the government should push through further deregulation of environmental policy while people are distracted by the crisis. The Bolsonaro administration has proposed several controversial laws, including Bill 191, which would allow mining on indigenous lands, and Bill 490, which halts demarcation and opens indigenous lands to mining and agriculture.
More recently, in March 2022, US President Joe Biden used the Defense Production Act to boost the mining of battery metals, but the administration has failed to protect sacred indigenous land at the same time. Construction of the Thacker Pass lithium mine in Nevada – the largest lithium deposit in the country – is under way, despite strong resistance for several years from local indigenous communities.
In some cases, the Coalition Against the Mining Pandemic researchers found mining companies themselves using the energy transition to justify projects. In Northern Ireland, the UK’s regulator of advertising ruled in March 2021 that an advertisement for Dalradian Gold was misleading when the company claimed that “there are also substantial quantities of silver and copper, metals which will be critical to enable the building of a renewable energy industry” for its project in Tyrone. The company failed to provide evidence “to prove that any quantity of copper extracted from the proposed mine would be used in the renewable energy industry”.
No such thing as 'green' mining
Some academics are sceptical of claims from companies and governments that mining would be ‘green’ or sustainable. While solutions are being developed to reduce the impact of mining, such as ways to extract other minerals from mining waste, the industry is still viewed as fundamentally harmful to the environment. Stuart Kirsch, a professor of anthropology at the University of Michigan, called sustainable mining a “corporate oxymoron” in a 2009 study. Globally, large-scale mining operations produce more than 100 billion tonnes of solid waste per year. A 2020 study published in Nature mapped mining areas to assess their overlap with important biodiversity conservation sites and found that new threats to biodiversity caused by mining “may surpass those averted by climate change mitigation”.
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Managing these environmental risks will be essential for policymakers, and these environmental considerations should not just include emissions. The harm mining projects may do if the ‘social’ in environmental, social and governmental (ESG) practices is left out can be devastating. An extreme case is the mining of cobalt in the Democratic Republic of Congo, where widespread human rights violations in mining include the use of child labour. In Brazil, the failure of a tailings dam near Mariana killed 19 people, displaced hundreds and polluted water supplies. In Australia, 46,000-year-old Aboriginal rock shelters, one of the country’s most significant archaeological sites, were blown up for an iron ore mine.
According to World Economic Forum (WEF) analysis, the mining industry should start taking into account social risks and can expect to be required to do more stringent reporting on the social impacts of individual projects.
“Social considerations – such as community opposition, local community impact, working conditions, demand for mining jobs, land resettlements, security, and indigenous groups and their right to free, prior and informed consent – will intensify,” according to the WEF. “The need going forward is for rebalancing of the “S” in ESG and integrating it correctly in how all companies involved in the energy transition go about their business, not just mining ones. This is the path to making the energy transition both sustainable and just.”
