Summary

The website content discusses the intersection of global mining projects with Environment, Social, Governance (ESG) principles, emphasizing the importance of sustainable mining practices for critical commodities amidst geopolitical and environmental challenges.

Abstract

The article highlights the increasing opposition from indigenous groups to global mining projects, which are being pursued to stimulate economic growth and achieve Net-Zero Emissions by 2050. It underscores the critical role of mining in securing commodities essential for the energy transition, particularly copper, nickel, and potash, which are vital for renewable energy and electric vehicle production. The BHP Group is cited as an example of a company shifting focus to more sustainable mining operations and divesting from oil and gas. The piece also addresses the broader geopolitical and economic shifts influenced by the COVID-19 pandemic, the global food crisis, and natural disasters, which have accelerated the need for a reevaluation of energy and commodity strategies. The concept of "future-facing commodities" is introduced, along with the challenges of operating in "tougher jurisdictions" with socio-political instability.

Opinions

The author suggests that overcoming pre-conceived notions about energy and commodities is crucial for addressing climate change and securing valuable resources for the future.
There is a call for increased cooperation on food and energy, particularly in light of Brazil's and Ukraine's limited capacity to meet global food demands.
The article emphasizes the importance of sustainable production and market mechanisms for commodities essential to the production of fertilizers and metals, which are energy-intensive but necessary for climate goals and food security.
The author posits that cybersecurity is a core issue in industrial policies, with implications for maritime shipping and the stability of global supply chains.
The piece advocates for a focus on electric mobility and electrification, which will significantly impact the demand for minerals like lithium, copper, and nickel from global mining projects.
The author encourages readers to follow the "Areas & Producers" publication for ongoing discussions about the future of critical areas and producers in the global economy.

ESG Stories & Global Mining Projects

Indigenous groups are coming out in opposition as global mining projects are being planned by miners and governments to spur economic activity and commit to Net-Zero Emissions 2050 during what has been called a new era for Environment, Social, Governance (ESG) and global mining projects.

The world has been grappling with a global food crisis. Governments want Brazil to produce more food, because it is already one of the world’s largest food-producing countries along with Ukraine. At the same time this is occuring, natural disasters are having catastrophic affects on populations (Turkey-Syria earthquake) and industrial production (Hurricane Ida), all of which hasten the global food crisis.

These trends are part of the much larger geopolitical trends that have been kickstarted by the global COVID-19 pandemic. The global pandemic has caused several countries to unravel, with socio-political instability that was building up for decades, and causing the global economy to be shaken up with uncertainties, putting the world’s largest companies in some of the most vulnerable areas.

All of these trends should give us a broader understanding of what’s happening in geopolitics and the global economy after the COVID-19 pandemic. Whether or not we can overcome our pre-conceived ideas about energy and commodities is going to be a key problem facing the world’s population after the global pandemic.

We need to get more serious about Climate Change, but also look at how the world’s most valuable commodities are going to be needed and secured in the future; hence the critical nature of future-facing commodities.

The geopolitical trends point to this conclusion: the future of global economic development is going to depend heavily on the effective production and supply of global commodities around the world. That’s why one of the biggest industrial trends for global mining projects is related to Environment, Social, Governance (ESG) frameworks and shareholder values.

The aspects of producer economy areas and indigenous groups’ issues play a big role in this phenomenon — and rightly so in my view. These trends are part of the much larger geopolitical trends that have been kickstarted by the global COVID-19 pandemic. The global pandemic has caused several countries to unravel, with socio-political instability that was building up for decades, and causing the global economy to be shaken up with uncertainties, putting the world’s largest companies in some of the most vulnerable areas.

Many of these mining projects, especially the ones for copper and nickel, are critical to achieving both the Energy Transition, most notably for renewable energy installations and Electric Vehicles (EV) production rollout.

The world’s largest metal miner BHP group plans to source and produce metals while taking a more sustainable and environmental focus on their operations globally. There are basically three main commodities in this future facing commodities space: copper, nickel and potash. The former two are both metals directly related to metal mining and stainless steel production, while the latter is primarily used as a source of fertilizer.

It’s true that BHP has been divesting its oil and gas assets for “future facing commodities” such as copper, nickel and potash.

The concept of future facing commodities is still new to many people. It has already become synonomous in global business news with “tougher jurisdictions” that are associated with vulnerable areas of political control and regulatory corruption. Read more about the Glencore case in Nigeria’s and DRC’s crude oil industry.

This implies that that the company will have to venture out to new areas — i.e. “tougher jurisdictions” — containing the high-grade copper, nickel and potash production capabilities desired for such results. CEO Mike Henry also announced atthe FT Mining Summit in 2021 that BHP Group wants half of its revenues to come from the production and exports of these future facing commodities by 2030.

Photo by Huper by Joshua Earle on Unsplash

I define this new era here:

The aspects of producers in areas where they operate must take into account how climate factors affect their operations globally; at the same time, the indigenous groups’ issues that are specific to those natural areas, all of which are at the nexus of commodities and geopolitics in the future.

In this context, the following two paradigms should be followed closely:

1. How the specific issues affect a target community (i.e. indigenous group) in a given area (i.e. natural area)

2. Why governments are adapting to strategy (i.e. EV batteries replacing fossil fuel automobiles) in the global context of radical changes to industrial policies (i.e. Industry 4.0).

Whether or not we can overcome our pre-conceived ideas about energy and commodities is going to be a key problem facing the world. We need to get more serious about Climate Change, but also look at how the world’s most valuable commodities are going to be needed and secured in the future — hence, the critical nature of the future facing commodities.

Here are three of the major conepts to know about ESG Stories and Global Mining Projects:

As the world is grappling with the global food crisis governments are hoping that needs that Brazil would produce more food, because it is already one of the world’s largest food-producing countries along with Ukraine. There should be more cooperation on food and energy in the future, look at some of the mutual problems and solutions shared at CES 2023 and Davos 2023. The current trend is highly unlikely to solve the global food crisis, as Brazil certainly cannot take the lead here, and Ukraine is forced to put all of its resources into the war effort. Thus, dealing with indigenous groups’ issues, where operations are located in vulnerable areas of political control, will be paramount to the future supply of raw materials and food production around the globe.
The vitality of this new era for global mining projects depends on the sustainable production and effective marketplace mechanisms for future facing commodities, such as those for producing fertilizers and metals, which are both going to be energy-intensive — in a world that must trade-off energy consumption for climate change goals and food security — as natural gas and grain market explain the key trends going forward. The goal of Net Zero 2050 is to produce these commodities with less energy intensity, not get rid of them completely, which is a key point that people seem to not take into consideration in these discussions about the Energy Transition. It also explains the link between oil/coal production markets and carbon reduction strategies.
Cybersecurity is not only a symptom of these issues; it is a core problem to be dealt with in respect to industrial policies across the board. One way to take down bad actors in cyberspace is for countries to cooperate more throroughly on issues pertaining to maritime shipping and transportation. That’s why the maritime domain is crucial to our well-being in the future: food exports depend on shipping lanes and access to ports. On the other hand, geography matters more than people realize, both from an economic and mobility point of view. A future mega-trend is in electric mobility (e-mobility). The source of which is Electrification, which I’ve argued here changes the dynamics on global mining projects, such as lithium, copper, nickel, etc.

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