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Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, an S&P Global podcast, where Esther and I take you inside the environmental, social and governance issues that are shaping the rapidly evolving sustainability landscape.

Esther Whieldon: On this podcast, we've heard multiple times how reaching net-zero emissions will require action by many different stakeholders across the private and public sector. It’s all hands on deck. 

Well in the coming episodes we'll be taking a deep dive into the many dimensions of the low-carbon energy transition. 

Lindsey Hall: That's right and we're doing this by taking the ESG Insider podcast on the road to Houston, Texas, for S&P Global's annual energy conference CERAWeek. 

At CERAWeek thousands of executives and government leaders gather to discuss the biggest challenges and opportunities for energy. And that includes for sustainability issues such as climate change and enabling the low-carbon transition. The conference convenes leaders from global energy companies and utilities, as well as from the automotive, manufacturing, tech, policy and financial space.

Esther Whieldon: And as you might guess from the background noise, Lindsey and I are on the ground at CERAWeek and over the next couple days, we'll bring you short interviews from the sidelines of the event. 

Lindsey Hall:  Okay. Let's dive into today's interview.  

Sinead Kaufman: I'm Sinead Kaufman, and I'm the Chief Executive of Minerals in Rio Tinto. So I joined Rio Tinto 27 years ago as a geologist. And I've done one of the things that I said I would never do in my career is work for the same company the whole time. 

But Rio Tinto as a business is the second largest mining company in the world. We work in 35 different countries. We celebrated our 150th anniversary last year. And we really have a focus across a broad spectrum of minerals ranging from iron ore, aluminum, copper, titanium to some of the other sort of more interesting parts of the business or different parts of the business like our diamonds business, mineral sands, and most recently, a real focus on lithium and also critical minerals.

Lindsey Hall: Now this is an energy conference, and I would love to know what is your perspective on the role Rio Tinto is going to play in the energy transition?

Sinead Kaufman: So Rio Tinto, we've always seen ourselves as a really long-term business. So we have assets like borates in California that's been around for over 150 years. We have Kennecott Utah Copper in Salt Lake that started operations in 1903 and is still going strong. So we really see ourselves as considering a long-term future. 

And when we look at our last 150 years of history, we've been incredibly successful through the use of fossil fuels to generate some of the technologies that we need to be able to extract minerals but also to run our businesses. And so when we look forward, we want to be part of the solution for the next 150 years in 2 ways, how do we decarbonize our own business — and obviously, there's a lot of technologies that are advancing really quickly to do that. And then the second is how can we provide the materials that are needed for the energy transition as well. 

Lindsey Hall: And a lot of those things that are necessary for example, for electric vehicles, those are minerals that are going to need to be mined. Can you give our listeners a little bit more of a sense of just how minerals fit into the energy transition? 

Sinead Kaufman: Yes. So we talk a lot about critical minerals these days. But if we take a step back, one of the most important minerals that's needed for the energy transition is copper. So copper is used to transmit electricity, and therefore, as you electrify more and more of the world, you need to have more copper. So for us as a business, our copper production globally is something that we want to try and grow to be part of that energy transition. But outside of the traditional copper has been around since the Bronze Age.

When you look at some of the newer materials, there's 5 times more critical minerals in an electric car than there is in an internal combustion engine car. And it's because you need magnets to be able to operate the car, which is rare earth elements. You need lithium in the battery and other chemistry as well to be able to power the car. 

People are also looking a lot more for low carbon materials that have been -- that have existed for a long time like aluminum, how do you produce it? It's a huge user of electricity. How do you produce it with lower electricity. And so technologies are really different. So solar panels. When you produce a solar panel, you've obviously got a frame and you've got the actual solar panel itself. 

We have a material called Tellurium which most people have never heard of. Tellurium improves the performance of the solar panel, so we can make them more efficient. And we found that we can produce that out of our mine in Kennecott and Salt Lake out of the current mining operations, it's a waste product that previously we hadn't got used for. So we're really finding new ways of using old technology in some cases, but also how can we participate in some of the new technologies that are emerging and finding ways to extract them from existing ore bodies.

Lindsey Hall: What is the conversation these days around sustainability or around the energy transition in your business? 

Sinead Kaufman: There's probably 3 ways we look at it. First of all, if we want to be around for the next 150 years, you have to have a sustainable solution for extracting materials. And primary mining is one, but there's a strong focus in the business as well on recycling materials as well. There's a lot of easily recyclable metals and materials that you can put back into circulation. So expanding some of the technologies on that. 

The second is, you must work with communities, with partners, with government to be able to provide a solution for future mines. People look at the mining industry and they see mining from the 1900s. Mining has moved a long way since then. So how do we produce technologically advanced mines that are done in collaboration with partners to be able to work sustainably in a community for a long period of time. 

And the third way we look at it is when we produce materials from an existing ore body, we lower the carbon footprint naturally. So a good example maybe in our Canadian business as we produce scandium, which is a really useful material to improve the performance of alloys like aluminum and how you could use it in different ways. It's using solid-state batteries. But we don't mine any more material to produce a scandium. It's already in our waste stream. 

So when we look at the U.S. critical minerals list for an example, where there's 50 critical minerals on the list, 10 of them we already produce, and we have the ability to produce a further 20, most of which don't need any additional mining if we crack the technology to extract them from existing ore bodies. 

Lindsey Hall: For listeners who might not be familiar, you mentioned that list of 50 critical minerals. Can you say just a bit more about that? 

Sinead Kaufman: Sure. So it's the USGS critical minerals list that I would say until maybe 5, 6 years ago, most people didn't really understand a lot about critical minerals or what it means. Now every country has a critical minerals list as they look to shore up their supply chains. 

And it really is a list of what are the key elements that each individual country in the case of the U.S., one of the minerals that are needed domestically, what are the ones that are produced locally and then where do they need to find other materials from. So it really is around material you must have if you want to advance the energy transition. 

Lindsey Hall: Okay. Well, would you say are some of the biggest challenges that both Rio Tinto and then the industry more broadly is facing when it comes to these conversations about transition?

Sinead Kaufman: I think the biggest challenge is helping people understand how mining works, the mine of the future or the future mining operations and how to permit and build something in a time frame that allows us to really take part of the energy transition. So a lot of mining projects are long term, high capital investment upfront. They need a lot of work done before you start actually mining -- and they will be there mostly for -- in our view, for at least decades, if not longer. So how do you build a permittable project, which is sustainable with the support of communities and also do that in a way that meets the time frames that we need to provide these materials. 

Lindsey Hall: Yes, absolutely. We heard U.S. Department of Energy Secretary and Jennifer Granholm talking earlier today about the importance of working with communities. I would love to hear more about what is Rio Tinto's approach to working with communities and also to addressing potential impacts on nature and biodiversity when you are setting up mines?

Sinead Kaufman: So first of all, I think the first thing with communities is you have to listen and understanding what their needs are and how do we meet those while also meeting the goals of maybe starting a mine. 

So examples I would give is in Northern Canada, we have a diamond mine at Diavik, which is 20 years old -- it's operating in a pristine environment. And to be able to do that 20 years ago, we had to do strong engagement and partnerships with all of the First Nations communities locally. We also had to have a closure plan before we opened, which is something that at the time wasn't a common occurrence. And we're actually starting to close Diavik now 20 years later. And so the same plans are still the ones that we need to meet. 

So listen to communities, understanding what their needs are, being able to meet those commitments long term, and build trust, are critical to being able to do that. 

Lindsey Hall: Okay. You're speaking on a couple of panels on this evening and then one later this week talking about transition minerals. Can you say anything about what you're expecting from those panels or give us a sneak peak of some of the talking points you might have prepared? 

Sinead Kaufman: I'm really looking forward to the discussion actually particularly over the next couple of days because there are so many things that other panels are going to contribute as well and we look at the diversity of panels. 

I think for me, the main talking points are really how do we work together with government? How do we work with other partners to be able to look at developing new projects? How can we contribute to some of those needs that society has, but how do we fix some of the challenges or overcome some of the challenges that we see. 

I love the fact that at CERAWeek, we've got people from all different industries. So I love mining, but we also have different perspectives here this week that maybe we don't we see at a mining conference. So it's going to be really interesting to hear how the energy sector are dealing with this and how other technology players that we've seen here already today are going to deal with this challenge. 

Lindsey Hall: Yes. It's very interesting for me as well. A lot of the events I attend a lot of interviews I do are they're sustainability-focused events or sustainability-focused professionals. But what I'm hearing today is that there is no consensus about the path for the energy transition. 

Sinead Kaufman:  I don't think there's one solution. We've got to find many. 

Lindsey Hall: This way you've been talking about Rio Tinto is taking a very long-term view, not even decades, but more than a century, is different than what I've heard so far from some energy companies. And they've reinforced to me that now what our shareholders care about is next quarter and short-term profit. Are you hearing a similar short-termism here at CERAWeek or among energy companies broadly? Or are you more hearing this move towards a longer-term view? 

Sinead Kaufman: I think shareholders will always want to understand what you're doing in the short and medium term. And I think for us as a company, balancing the short-term needs, which is still to continue to produce to be able to do it sustainably is critical.

Making the transition within our own business to decarbonize is one that we have to be able to do economically. And as a long-term business, we've had various different philosophies over the years. But in the time I've been with the company, it's fundamentally been the same. We need low-cost operations that run productively, efficiently, and therefore, as commodity cycles come and go, you can manage to weather that storm. 

As we go through the energy transition, we've got to be very clear that some of the decisions we make, we may not .... see the benefit of, in the short term. But if we want to be random 150 years, we have to make those decisions and how we do that working with policymakers, how we do that, working with different players in the industry to make it happen is a key challenge for us. But I haven't heard as much around short term is necessarily, certainly not today at CERAWeek, but from our investors, people want us to do both, and that's the challenge that the company has is you need to do both if you want to be around in 150 years. 

Lindsey Hall: Okay. What have you been hearing so far today? 

Sinead Kaufman: I think hearing a lot of interest in technology and how does technology play a role in moving forward for the energy transition. We've spoken to some really interesting people already about how they apply different technologies from different sectors into, say, mining or into lithium processing. So I think that's a key component. 

And I think the other is really strong appetite to see how from a policy perspective, how can we advance the energy transition through using science, using industry, and using partners to be able to deliver those outcomes. 

Lindsey Hall: Okay. So on the technology front, where do you see the most opportunity for technology in the mining space?

Sinead Kaufman: For us, a lot of it is decarbonization. So we spend a lot of our efforts internally in how do we decarbonize our business. I think we are a mining company. When we look at energy companies, they've got a completely different perspective on that and probably at a much larger scale in some ways than what we do. 

So how do we take some of that, understand some of that technology, and bring it internally? But I think decarbonization, whether it's through energy, access to clean energy, or technology advancements to be able to use less of a carbon footprint in technology processes and downstream processing, is going to be critical as well. 

Lindsey Hall: In addition to a lot of discussion about climate and decarbonization strategies, we're increasingly hearing about the need for companies to also have a strategy for nature, this idea that there's no net zero without being mature positive. How do you approach nature in your business? How are you thinking about it? Is it increasingly on your radar?

Sinead Kaufman: So very much increasingly on our radar. We've moved from, I think, as an industry, but certainly as a company, we follow that trend of -- I was thinking of having good environmental practice or having a nature some sort of nature perspective or biodiversity perspective to...  Within our own business, a language we use is we need to have excellence in ESG. It's not good enough anymore to consider just the impacts and mitigate them. It's how do you actually think about it holistically from a biodiversity perspective. 

So maybe one example in Madagascar, which is an incredibly unique biodiversity where we operate our mineral sands operations is we're running trials on what does a true sustainable nature-based solution look like in mature forest. And it's not about preservation because there are people who live in those in the forest that need to also maintain a living. So how do you do it in a way that preserves nature, improves the outcomes from a rehabilitation perspective from an environmental perspective, but also provides people with the ability to live in harmony with nature?

Lindsey Hall: Are you finding metro-based solutions? Are you creating them? What does that look like?

Sinead Kaufman: We're mostly trying to create within our own footprint. And I think we're very conscious that there are other solutions out there. But for us, certainly, in the unique biodiversity areas that we operate now, it's finding solutions that we can help develop. We obviously have experts in-house, but also working with other partners to be able to develop that particularly in locations where we know we have a strong ability to really impact positively on the biodiversity of the region. 

South Africa is another great example where we're mining mineral sands on the coastline. We do significant rehabilitation there. It's long term and how do we, again, work in harmony with the communities that live in that area. So I think for us, it's an area that we're very proud of the work we've done. We need to continue to increase that across our global footprint, and we've really started with the most important areas that we see that we have an impact on. But we, when we talk about mining long term, we also talk about closure of mining and legacy, and we want to make sure that we leave a really positive legacy at the end of our mining operations. 

Lindsey Hall:  So we heard today how one of the world's largest mining companies is approaching the energy transition, how it's engaging with local communities and how nature is increasingly on the agenda.

We have so many more insights to share from CERAWeek. 

Esther Whieldon: So please stay tuned for more key takeaways.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider. If you like what you heard today, please subscribe, share and leave us a review wherever you get your podcast.

Esther Whieldon: And a special thanks to our agency partner, The 199. See you next time.

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