It’s time for mining companies to embrace ESG

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Guest Author

Teague Egan

Love it or hate it, environmental, social and governance, or ESG, is here to stay. Yet there is no one-size-fits-all strategy.  

No sector embodies the challenge more, perhaps, than mining. To put it bluntly, ESG has never played a large role within the mining industry. The extraction of resources has always had a lasting effect on the environment – but this does not need to define the future. 

Mining is an intensive land-based activity. More often than not mines are located near local communities or represent a major employment opportunity for the region. Herein lies several opportunities for mining companies to showcase their sustainability approaches and try to make good on the ESG promise.

From improving local socio-economic conditions to creating tailored community-driven projects that seek to encourage a long-term rehabilitation of the land post-mining, options abound for mining companies willing to look past their bottom lines. Listening to the communities near extraction sites, working with them to find solutions that benefit them and their children before, during and after the mining process is not an emerging field of management, but rather, one that has been ignored. 

Best practices for ESG and corporate social responsibility (ESG’s forerunner) have been known for decades, they just haven’t been acted upon. Part of the reason there has been no accountability is because there is no enforced monitoring. If the sector is not going to be forced to change, it will have to do so by its own volition – and preferably without greenwashing.

Net zero goals

Lithium is one of the most important elements in the world’s shift to a clean, low-carbon future. Declared a critical resource by the U.S. Geological Service during the Trump administration, lithium powers the batteries found in household electronics and electric vehicles, and reduces the intermittency of renewable energy by providing high capacity energy storage. 

As part of a bipartisan infrastructure bill, the Biden administration is dedicating more than $3 billion to build a domestic supply chain for critical battery materials. This development only hints at the importance of lithium and the subversive geopolitical competition happening to control the lithium supply chain. 

“The current energy transition towards a low-carbon economy is expected to be much more mineral-intensive than previous transitions,” explain researchers Florencia Heredia, Agostina L. Martinez and Valentina Surraco Urtubey in a recent study. “With a focus on the energy transition and the path towards a low-carbon future, it is expected that the demand for lithium will continue to grow.” 

What Heredia et al. did not expect was the frenzied global competition for the metal that would push lithium carbonate prices to a point where auto manufacturers are considering becoming lithium extractors themselves in order to keep costs down.

Lithium and other battery materials are critical to achieving net-zero goals. But we must acknowledge the challenges involved in scaling up the lithium extraction sector – and the opportunities available to reduce or mitigate this impact. 

There are currently two main ways of acquiring lithium: ore mining and brine extraction. The former follows traditional mining processes such as extensive earth removal and heavy chemicals. The latter, brine extraction, is less geologically intensive but requires vast amounts of water. Ore mining will be difficult to reform, but there is already technology on the market capable of making brine extraction more sustainable. 

Direct Lithium Extraction (DLE) has shown promise by using less water and no chemicals in its processes, all while solving supply issues. My company, EnergyX, is one of several companies pursuing this path. 

But technology is not enough. Strong ESG policies should also play a role in the lithium mining sector as production ramps up. What use is building a sustainable future if every level of the supply chain is not sustainable itself? This means talking to stakeholders to find out what can be improved in local communities and how new technologies and rising demand for lithium can positively impact them, rather than damage their ecological and social balance. EnergyX did just that with its DLE technology. 

Community engagement

EnergyX developed its Lithium Ion Transport and Separation (LiTAS™) system based on the need for sustainability within the lithium sector, creating technology that uses little to no water and no heavy chemicals in its extraction process. Our sustainable technology is supported by our ESG policy, which aims to improve local communities’ socio-economic standing where our technology is deployed. 

When our LiTAS™ pilot plant was deployed to Bolivia for field tests, we took the opportunity to enact our ESG strategy. We liaised with local leaders and asked for their input on where they needed support and the best way to provide it to them.

Some of the original ideas revolved around improving access to education and clean transport, providing funding for schools as well as e-bikes that would showcase what the lithium extraction from the nearby Salar de Uyuni salt flat would lead to. After several discussions with local leaders, the communities’ priorities were defined, as was the scope of our support. 

The e-bikes we had initially thought of, while symbolic, would not have been used in local communities, according to their representatives. They might have been useful for a photo-op or a feel good story, but there were more pressing issues for the betterment of the community. Local leaders instead identified a lack of infrastructure and funding of visual health as a key roadblock to students’ access to education, while the COVID pandemic had put financial strain on the region’s healthcare system. 

As a result, EnergyX launched a program providing free consultations and glasses to students, and earmarked donations to support key healthcare infrastructure. A portion of the $100,000 the company has put aside for these projects will renovate six schools and a technology computer lab. 

A framework for monitoring, reporting, and milestones was created in conjunction with local officials to ensure the programs run efficiently. This ESG exercise cemented our belief that sustainable solutions are easy to implement if your business has the right priorities. Although our company was ruled out of a competitive tender in Bolivia, we maintain our commitment to the communities in Uyuni and Potosi, and will continue to support them through our programmes.

For too long, mining has been dogged by the environmental and social damage that its extraction activities are responsible for. The industry as a whole must move towards changing the antiquated status quo. Advancing new technologies, shifting operations to become as sustainable as possible, and undertaking a strong eco-friendly supply chain are imperative. 

Teague Egan is CEO & Founder of EnergyX.