PDAC: Facing the challenges of mine decarbonization

The mining industry’s decarbonization journey is more akin to a twisting trail race than a straight road race, with uphill efforts, sharp turns and obstacles en route, miners said during a recent industry conference.

Mining firms outlined their challenges on their pathway to decarbonization at “The amazing race to decarbonize” session on Mar. 6 at PDAC in Toronto.

Panellists from Lundin Mining (TSX: LUN), Seabridge Gold (TSX: SEA; NYSE: SA), Baffinland Iron Mines and Dundee Precious Metals (TSX: DPM) shared their perspectives in a conversation moderated by Keith Russell, director of the Atlanta-based Partners in Performance management firm.

Credit: Blair McBride

Each speaker focused on how their firms are at different stages in the pursuit of decarbonizing their operations.

One of the most important steps in decarbonizing, if not the first one, is tracking progress with data and aligning it with the plan to reduce emissions.

Cora Devoy, director of sustainability with Lundin Mining, told the panel that it could be a “huge” challenge to get reliable data so that the company isn’t accused of presenting a curated picture of its progress, or greenwashing.

“We need the right data. The key is good, reliable data,” she said.

According to Melanie Miller, chief sustainability officer with Toronto-headquartered explorer Seabridge Gold, data should also be geared towards the proper purpose.

Although Miller said Seabridge is proud of its engagement with local and Indigenous communities, it’s conscious of who reads its reporting.

“[With] the metrics and the reporting and the alignment, we are working on our baseline and we want to do that with integrity when it comes to Scope 1, Scope 2, and Scope 3 [emissions] reporting,” she said. “But we also want to report what is critical to our stakeholders and what is material to our business, not just what is appeasing to reporting agencies or investors.”

Scale of decarbonization

Sonia Gupta, Dundee Precious Metals’ director of sustainability, noted that Dundee is aware of its place in a wider supply chain and how it works with larger companies.

As a smaller firm in that chain, she knows it isn’t responsible for decarbonizing an entire industry and can’t “green the power grid” on its own.

“We have a challenge that a lot of our suppliers are very carbon intensive,” she said. “I think what we can do, and what we do benefit from is having more intimate relationships within our supply chain and within our suppliers. To work together to actually try to find those optimization opportunities.”

Dundee, for its part, has had a carbon management plan since 2011 for its operations in Bulgaria, Namibia and Ecuador. It released its first Task Force on Climate-Related Financial Disclosures report in 2020 and its first emissions report last year.

Gupta said Dundee aims to be net-zero by 2050 and cut its emissions by 37% by 2035.

But decarbonization doesn’t look the same everywhere, as Udloriak Hanson, Baffinland’s vice president of community and sustainable development, explained to the panel.

At its Mary River iron ore mine, located in the northern region of Baffin Island, Nunavut, the company focuses on diesel use reduction and shifting to biofuels and offsets.

Although Baffinland closely tracks the operation’s energy usage, being so remote from the southern power grid makes it difficult for the mine to transition to net zero while using diesel.

Social costs

Remote mines like Mary River show how technical challenges can be magnified in mining decarbonization efforts.

Hanson cited a regulation by the International Maritime Association (IMO) in 2020 that would ban heavy fuel oil in Arctic waters. However, the fuel is often used in shipping in the Far North. The federal government has said it supports the ban.

While the ban would reduce the risk of the fuel polluting northern waters, Hanson noted that many Inuit fear the ban will raise shipping costs in the Arctic.

“Everything is shipped up north, if it’s not shipped, it’s flown,” she said. “If it’s going to cost more to ship, then it’s going to cost more to put food on the table. And no one had demonstrated or provided any assurances that this wasn’t going to hurt the Inuit. There are these issues that you really have to weigh and ask if it’s worth it at this point in time?”

A similar issue occurred when Baffinland was touring Nunavut communities for its proposed Phase 2 expansion of the Mary River mine, which the federal government rejected last November. The company discussed with communities the use of zero-emission windmills to power the mine site, but many Inuit had concerns.

“It really had everything to do with them being afraid that we were going to affect their food chain, that we were going to affect the migration of animals or birds,” Hanson said. “What we thought might have been a good thing to do at our mine, and I’d argue it is…is considered dangerous for Inuit. They’re not saying don’t do it, but [they asked] where’s the data? Where’s the information to prove that this isn’t going to affect us?”