World Bank, Germany, Rio and Anglo set up “climate smart” mining fund
The World Bank launched the Climate-Smart Mining Facility on Friday, the first-ever fund dedicated to making mining for minerals climate-smart and sustainable.
The fund will support the sustainable extraction and processing of minerals and metals used in clean energy technologies, such as wind, solar power, and batteries for energy storage and electric vehicles.
The World Bank is targeting a total investment of $50 million, to be deployed over a 5-year timeframe. The fund will focus on activities around four core themes: climate change mitigation; climate change adaptation; reducing material impacts and creating market opportunities, contributing to the decarbonization and reduction of material impacts along the supply chain of critical minerals needed for clean energy technologies.
The facility evolves out of a World Bank report “The Growing Role of Minerals and Metals for a Low-Carbon Future” which found that a low-carbon future will be significantly more mineral intensive than a ‘business as usual’ scenario.
Global demand for strategic minerals like lithium, graphite and nickel will skyrocket by 965%, 383% and 108% respectively by 2050, according to the World Bank’s updated 2018 projections, which are based on the assumption that countries will implement the Paris Agreement.
The multi-donor trust fund will work with developing countries and emerging economies to implement sustainable and responsible strategies and practices across the mineral value chain.
Partners include the German government and private sector companies, Rio Tinto and Anglo American. The Facility will also assist governments to build a robust policy, regulatory and legal framework that promotes climate-smart mining and creates an enabling environment for private capital.
Projects may include supporting the integration of renewable energy into mining operations, given that the mining sector accounts for up to 11%of global energy use and that mining operations in remote areas often rely on diesel or coal; supporting the strategic use of geological data for a better understanding of “strategic mineral” endowments; forest-smart mining; preventing deforestation and supporting sustainable land-use practices; repurposing mine sites and recycling of minerals and supporting developing countries to take a circular economy approach and reuse minerals in a way that respects the environment.