Energy transition represents 'era defining opportunity' for Africa: Anglo CEO

The energy transition represents an "era-defining opportunity" for Africa due to the continent's vast natural reserves of the mined minerals needed to drive the change to a low-carbon economy, Anglo American Group CEO Duncan Wanblad said May 9 at the Investing in Africa Mining Indaba 2022.

To limit global warming to 2 degrees Celsius will require almost $2 trillion in capital investment over next 15 years, Wanblad said in his keynote address, adding that this would be new capital and would have to be invested in the "green" metals that were abundant in many parts of the African continent.

Metals and minerals will be key to the development of the energy transition, and the urgent imperative to decarbonize means that demand for mined minerals is set to increase exponentially in the coming years, he said.

Global plug-in light duty electric vehicle sales are expected to reach 13.7 million units in 2025 and 26.8 million units in 2030, up from 6.3 million units in 2021, according to S&P Global Commodity Insights analysts.

The energy transition is expected to boost battery metal prices, with S&P Global Commodity Insights' seaborne lithium carbonate and lithium hydroxide assessments up 121.9% and 152.4%, respectively, since the start of 2022 at $75,000/mt CIF North Asia and $80,000/mt CIF North Asia as of May 9.

"We cannot miss an era defining opportunity... We are setting up for a new economy and the African continent should and can play a significant role," Wanblad said.

However, he said steps would need to be taken by both the private and public sectors to ensure the transition was not a missed opportunity for Africa. Companies would have to advocate the right policies, Wanblad said, while government policy should support regulatory certainty, as well as the rule of law, security and the rooting out of corruption.

"If the last two years have taught us anything it might be this: the power of partnership, working together does achieve extraordinary outcomes and it's in this we can pool expertise with government," he said.

Transformation

To meet the demand coming from decarbonization, Wanblad said the mining industry would need to continue to transform itself at pace, and also to consider its role in reaching a net-zero carbon future in the cleanest and most socially responsible way.

"Never before has there been such an obvious and urgent demand for what we do... Our challenge is clear -- we need to go about meeting that demand in a different way than how we've been able to do it until today, in harmony with the needs of society and environment, and also add value in an inclusive way for all stakeholders," he said.

"We should not underestimate how much more we'll have to innovate to meet this transition," he said, citing the need to develop innovative mining technologies to make operations safer but also to overcome challenges such as lower ore grades.

Wanblad pointed to the hydrogen-powered mine haul truck pilot launched at its Mogalakwena platinum group metals operation in South Africa's Limpopo province earlier in May, the largest of its kind. He said rolling this technology out across its global fleet could mitigate up to 80% of the diesel emissions at the company's open pit mines.

Hydrogen is expected to be adopted widely across heavier-duty forms of transport where batteries alone won't work, Wanblad said, adding that this was a tangible example of innovative thinking for positive and sustainable outcomes.

Cornerstone of energy transition

"While we work to decarbonize our own operations, there is one key point that often gets lost: the world cannot decarbonize without the products of mining -- mining is the cornerstone and enabler of the energy transition," Wanblad said.

He said platinum group metals (PGMs), for example, had long played and would continue to play an important role in reducing emissions and an even more important role in the production of green energy and energy storage capacity to meet the world's energy demand by 2050.

He said the picture was even more positive for copper, a "key ingredient" in the era of renewable and sustainable energy, as it is needed in wind turbines, electric vehicles and solar panels.

"I think my point is clear -- mining has a long-term goal in delivering the energy transition and we must ensure all mining is now climate-smart mining," Wanblad said.

He said that it was also important to shift perceptions of mining in the wider society and ensure ethical sources of raw minerals or metals that formed final products.

"The burden to mine responsibly and mining is not just part of or a cog in the future, I believe it's the bedrock," Wanblad said.