World Bank launches first-ever mining fund

THE World Bank has launched a multi-donor fund, the Climate-Smart Mining Facility. The fund is the first-ever to be dedicated to promoting “climate-smart” and sustainable minerals mining.

The Climate-Smart Mining Facility was developed as a result of the World Bank report, The Growing Role of Minerals and Metals for a Low-Carbon Future. According to the report, a low carbon-future will rely significantly on minerals, with the demand of minerals such as lithium, graphite, and nickel rising by 985%, 383% and 108% respectively, by 2050. This is based on the assumption that countries are able to keep global warming below a 2°C rise, and in a 1.5°C scenario the increase will be higher.

Increasing demand for minerals and metals presents an opportunity for resource-rich developing countries, but it could also present a challenge. Climate-smart practices are needed to avoid increasing the negative impacts of mining.

The fund aims to support sustainable extraction and processing of minerals and metals used in clean energy technologies, such as wind power, solar power, and batteries. It is focussed on helping mineral-rich developing countries and emerging economies to benefit from the expected demand increase whilst minimising the resulting environmental impact and climate footprint.

The Climate-Smart Mining Facility will work with developing countries and emerging economies to help establish responsible and sustainable practices across the mineral value chain. Working with governments, the fund aims to assist in the development of robust frameworks that “promote climate-smart mining and create an enabling environment for private capital”.

The fund’s work will focus on activities concerning four core themes: climate change mitigation; climate change adaption; reducing material impacts; and creating market opportunities.

Projects may include:

• Supporting integration of renewable energy into mining operations. The mining sector accounts for 11% of global energy use and operations in remote areas often rely on coal or diesel.
• Supporting the use of geological data to promote better understanding of mineral endowments.
• Forest-smart mining: preventing deforestation and supporting sustainable land-use practices.
• Recycling minerals: support a circular economy and reuse of minerals in developing countries, in an environmentally sound manner.

The founding donors of the Climate-Smart Mining Facility are the German Government, Rio Tinto, and Anglo American. The World Bank aims to achieve a total investment of US$50m to deploy over five years.

Mark Cutifani, Chief Executive at Anglo American, said : “To have real impact we must work together with governments and operators to bring changes. That is why we are supporting the World Bank with this facility, to provide funds that can transform our industry for the future.

“Mining cannot continue its long path of simply scaling up to supply what the world needs. We need to do things in dramatically different ways if we are to transform our footprint and be valued by all our stakeholders. Our first responsibility is to reduce our energy and water usage, and our emissions.”

Riccardo Puliti, Senior Director and Head of the Energy and Extractives Global Practice at the World Bank said: “The World Bank supports a low-carbon transition where mining is climate-smart and value chains are sustainable and green. Developing countries can play a leading role in this transition: developing strategic minerals in a way that respects communities, ecosystems and the environment. Countries with strategic minerals have a real opportunity to benefit from the global shift to clean energy.”