Transcript by Kensho.


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, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy.

Esther Whieldon: From December 7th through 19th, government representatives from around the world are gathered in Montreal to build consensus around protecting global biodiversity. The conference is called COP15, and it's sort of the nature- and biodiversity-focused equivalent of the UN's COP27 climate conference.

And we're already seeing announcements coming from COP15. For example, on December 12, 7 countries, including the U.S., Canada, Japan, Germany and Australia, announced they have formed a Sustainable Critical Minerals Alliance. Members of the alliance will work towards developing sustainable and socially inclusive mining practices and sourcing of critical minerals. Their goals include encouraging industry practices that prevent biodiversity loss and that drive towards net positive benefits to the natural environment.

We recently published a podcast episode on what to expect at COP15, and we'll include a link to that in our show notes. And also stay tuned for an upcoming episode where we'll bring you more on-the- ground coverage of this conference.

Lindsey Hall: As we head into 2023, it's increasingly clear that these 2 topics, nature and climate, are inextricably linked. For example, mining exploration around the world is picking up as companies seek new deposits of elements like lithium and copper to support the energy transition. But research by S&P Global Sustainable1 finds there's overlap between existing mines and mining exploration sites and some of the world's most important areas for biodiversity.

Enabling the energy transition while managing the potential negative impacts on biodiversity is a complex challenge. It's also increasingly urgent given that trillions of dollars of economic activity rely on nature.

Esther Whieldon: I co-authored that research that Lindsey just mentioned. We found out about 5% of more than 24,500 mining sites around the world are in what are called Key Biodiversity Areas, or KBAs. KBAs are areas the scientific community has identified as contributing significantly to the global persistence of biodiversity. Now our research found that of the mining sites that intersect with KBAs, 29% are for extracting minerals that will be needed for the low carbon transition.

Another thing we noted in our written piece was how recycling critical minerals could help offset some of the need for extracting more minerals from the Earth's crust. This could, in turn, reduce the impact of the transition on nature as well as on local communities and indigenous communities. We'll include a link and our show notes to that article in case you want to read more.

Lindsey Hall: In this episode of the podcast, we're digging into what the mining industry is doing to reduce its impact on nature and local communities. We also explore what would need to happen to ramp up critical minerals recycling. For these answers, we're going to be speaking with 3 guests today. One is Rohitesh Dhawan, who is President and CEO of the International Council on Mining and Metals, or ICMM. And that group aims to enhance the contribution of mining and metals to sustainable development. It works with 26 of the largest mining companies in the world that collectively represent about 1/3 of the global metals and mining industry.

To understand what kind of investments are being made in recycling critical minerals, we'll talk with Brian Menell. Brian is Chairman and CEO of private mining investment and operating company TechMet. Brian founded TechMet in 2017 to invest in metals needed for clean energy technologies as well as battery recycling.

And we'll talk with Raquel Dominguez, who is the Circular Economy Policy Advocate at Earthworks. That's an environmental group that aims to protect communities and the environment from the adverse impacts of mineral and energy development while also promoting sustainable solutions such as critical minerals recycling.

Esther Whieldon: In case this is your first time hearing the term circular economy, we'll hear more about what it involves throughout this episode. But in a nutshell, it refers to shifting the economy away from a model of production and consumption to one where materials, products and services are recycled, reused and repurposed for as long as possible before entering the waste stream.

Another term you'll hear is World Heritage Sites. These are places around the world that the UN agency UNESCO has designated as having a "outstanding universal value to humanity and therefore, needing to be protected." Some examples you may be familiar with include the pyramids of Egypt, the Galapagos Islands at Ecuador or the Grand Canyon in the U.S.

Okay. Now let's turn to my interview with Rohitesh of ICMM. I wanted to know how ICMM and the mining sector is reducing the impacts of mining on nature and indigenous or local communities.

Rohitesh Dhawan: Esther, I'd start by saying that the impacts of mining on nature and indigenous and local communities can be both positive and negative. And let me deal with them separately. Let's start negative because that's what many people would automatically assume with mining. In the ways that we operate, we can cause damage to the environment and damage to local communities where we operate. A couple of examples here would be the collapse of the dam at Samarco in Brazil in 2015, which caused significant environmental damage. And then many people might be familiar with the destruction of cultural heritage at Juukan Gorge a few years ago.

Why do I start there? It's because I think it's really important that we, as an industry, face up to the harsh reality that when things go wrong, because of the nature of mining, it can have very real and significant consequences. And so we take every possible care we can to minimize negative consequences. On the case of nature, that means applying the mitigation hierarchy. What that really means in practice is do everything to avoid any negative impacts and, if we can't avoid them, to minimize them and only use offsets as a last resort. We also don't mine in World Heritage Sites. That's a commitment we've had since 2003 to protect the most vulnerable parts of the planet.

When it comes to indigenous peoples and local communities, we have a commitment to the UN principles on business and human rights, the voluntary principles on security and human rights, and we do everything possible to obtain the free prior and informed consent of indigenous peoples where we mine. Esther, that's to make sure that we minimize any potential negative consequences of mining on nature and local communities, but I must recognize that, that hasn't always been the case.

On the positive side though, when we do it right, actually, mining can be a really positive force for development for both nature and for local communities. Just a couple of examples here. On nature, for example, mining companies are very large stewards of land when it comes to the amount of land that we have available to us, even though the amount that we actually mine on is really, really small. So mining disturbs less than 0.1% of the Earth's surface. So it's a really small footprint relative to the impact we have economically, but often that can happen in really sensitive areas.

Esther Whieldon: So when you say -- use the word we, are you talking about the mining sector overall or sort of the ICMM members?

Rohitesh Dhawan: I'm talking primarily about ICMM members because for them, the principles that we commit to, and there are 10 principles of responsible mining, are a condition of membership. So they're not just a nice to have. We're not just talking the talk, but companies make real hard-edge commitments that they apply through each of their sites in order to become members and remain members of ICMM. So between us, we have 26 of the world's largest mining and metals companies. We have around 650 mine sites.

But Esther, I'm very conscious that even though this group represents the biggest companies and those who self-identify as wanting to promote leading practice on sustainable development, the global mining industry is much larger. By last count, there are something like 14,000 known mining companies who between them have in excess of 30,000 mine sites around the world. And so we try everything we can to make sure that our sites apply the best principles and practices when it comes to responsible mining.

But I recognize that the experience that people have with mining can be really different depending on where you are. And that's why I really encourage the investor community, governments to take principles of responsible mining and apply them to the wider industry so that wherever we mine, the standards are kept as high as possible.

Esther Whieldon: What is the perspective of the ICMM and the mining sector when it comes to this issue of minerals and metals recycling?

Rohitesh Dhawan: Esther, as ICMM, we strongly support the development of a circular economy. It is so critical to achieve our goals on climate change as well as our goals on nature, economic development and the other sustainable development goals. People might think that as the mining industry, we would be against the idea of a circular economy where more metals are recycled. Quite the contrary, we're really supportive of it because it is so essential to building a sustainable planet.

And here, I think we have not always helped the world understand the role that metals and minerals play in a circular economy. I wouldn't blame people if they think of metals a bit like how you might think of plastic, for example, a source of waste, when in reality, they're anything but that. They are a source of durable use and value. I say that because most metals can be recycled infinitely without losing any of their key properties. Take copper, for example. All the copper we've produced since 1900, 2/3 of that is still in useful circulation. Same with aluminum. 2/3 of aluminum ever produced is still in useful circulation.

And so we see our contribution to the circular economy as being one in which we provide the world with a stock of durable metals and minerals that can be recycled and reused over and over again. And it's not like a typical other product where you have to wait until the end of its life in order to put it back into something else. Actually, metals can be used partway through their lives if actually the system is geared to use it in a more productive way. So although 90% of the world's materials that we use end up as waste, in the case of metals and minerals, very small amounts of them actually end up as waste because they have an intrinsic value that isn't lost.

And I think the world is absolutely right to look at maximizing the potential of what one might call above-ground stocks, essentially metals we've already mined, to meet this enormous increase in demand we're likely to see for critical minerals, which, as the IEA and the World Bank shows, is in some cases up to 20x in the case of lithium over the next 10 to 20 years.

But there are limits in the short and medium term to how far recycling can help us meet our demand. Let me just give you the example of copper. Copper is used in everything because of its properties for how it conducts electricity. So it's used in all types of electrical equipment and machinery. And when it comes to cars, for example, if you drive a car that runs on petrol or diesel, you're using some amount of copper. Actually, if you switch that vehicle to electric -- to being an electric vehicle, you would immediately increase the amount of copper in that car by 4 to 6x.

Now currently, we produce around 21 million tonnes of copper a year, but we require 25 million tonnes of copper a year. That gap of 4 million tonnes is made up of recycling. And so already, recycling is a really important source of metal and mineral.

When you look out, though, to 2030, because the growth of electric vehicles and renewable energy, we're going to need about 30 million tonnes of copper by 2030. But where are we going to get that from? We certainly are recycling a lot of copper already. Recycling is not going to be able to meet that increased demand. And then when you look out to 2050, the demand could be in excess of 50 million tonnes.

So yes, we should absolutely look at recycling and maximizing the contribution of recycling, but Esther, the big issue that the world faces is we simply don't have enough of these metals and minerals produced fast enough to meet the increase in demand. And the reason for that is it currently takes between 8 and 12 years to bring a new mining project on stream. A lot of that has to do with permitting. A lot of that has to do with how governments have set up mining regimes. That needs to be looked at urgently because if we don't get mining stocks coming more on stream quicker, we're not going to be able to supply the metals and minerals that are essential for the low carbon transition. And recycling has a critical role to play, but we're still going to need a massive increase in primary production.

Esther Whieldon: So it sounds like the recycling of certain metals and minerals is near its peak, right, like for copper or for aluminum. And that would explain why most of the studies that I've seen focus on things like lithium and things that haven't been historically recycled as much.

Rohitesh Dhawan: That's right. And that's because lithium is relatively -- in its use at the moment is relatively new in the expansion. Of course, lithium has been used in batteries for 30 or 40 years already. So at the moment, the estimate is that less than 5% of lithium is recovered and recycled. And that's because it's still, in many cases, in productive use. And when you think about the concentrations of commodities like lithium in things like our cell phones that all of us have stashed away in our drawers, it's actually quite diffuse. So one electric car battery has something like 10,000x the amount of useful material than a cell phone. So you would need to hoover up 10,000 cell phones to make up the amount of metal you can get from one electric car battery. But many of the electric car batteries that have been built are still in use.

So for the next few years, we're going to see a situation where those commodities, we just don't have enough of the stock to recycle them. But as we get into the next generation, probably from about 2030 onwards, we'll then end up with a stock of batteries and other materials that can then be reused and recycled. So actually, what we're likely to see is, starting this year, our capacity to recycle is greater than the amount of recycled material available. In other words, you will have recycling factories running idle for the next few years. In some cases, it may be a 3:1 situation. So we have 3x as much capacity to recycle as we have material.

Over time, that will fix itself as we get more material to recycle. But until now, Esther, the important thing is what we were lacking was capacity to recycle. Over the next few years, what we're going to be lacking is the actual materials in order to be able to recycle them. But then when we have more of a stock, that's when we can start to use this recycling capacity. And that's what I was saying really. What we want to do is build up a stock of metals and materials that can then be continuously recycled. And our commitment at ICMM is that as we're producing those metals and minerals, we do them as responsibly as possible.

Esther Whieldon: I asked Rohitesh, to what extent could ramping up critical minerals recycling beyond where it is today present a financial risk to mining companies? By the way, you'll hear him mention Scope 1 and 2 emissions. Scope 1 refers to direct emissions from company's operations and Scope 2, those are indirect emissions primarily derived from purchased energy. Okay. Here's Rohitesh.

Rohitesh Dhawan: So as I was saying, I think in the short to medium term, which our industry thinks in decades, in the next 10, 20, 30 years, you will have both economies essentially or both business models working in parallel. You'll have a recycling-based business model, and you'll have a primary production business model. And many companies will have both. So for example, an ICMM company, Hydro, currently supplies its customers with aluminum that is made of a minimum of 75% post-consumer recycled scrap. So Hydro recognizes that the future involves recycling in a much bigger way, but they still produce primary aluminum.

And so they recognize over the next 10 to 30 years, we will need both. We need recycling capacity, and we will need primary production. Thereafter, I would expect that most companies will have at least a portion, if not the majority, of their business based on the reuse and recycling of metals and minerals. And herein lies a great advantage for companies that have been involved in the business of producing primary metal, which is who knows the metal better than the person who produced it. And so typically, the old business models have focused on extracting it from the ground, selling it to somebody else and then never really knowing what happened to that metal after you've sold it to someone.

But actually, I think in the future, what you're going to find is companies that produce the metal know where it comes from, can ensure that right from the beginning, we have a really good sense of its provenance and using technologies like blockchain, we can make sure that it's tracked through its life cycle. So in other words, you may never need to sell a piece of metal anymore, right? You might just actually say, I'm loaning it to you, and I'll take it back at some portion of time because I can then loan it to somebody else. So that means a really different business model than the one that exists today.

Companies are already building that, and I think we'll see much more innovation on that going forward.

Esther Whieldon: What needs to happen and what kind of time line are we looking at to really have the mining industry take on biodiversity, nature issues and really reduce their impact in a notable way?

Rohitesh Dhawan: Great question, Esther. So a few things need to happen. The first is that mining operations need to themselves become net-zero operators. So we've talked about how the products we produce are essential to decarbonizing transport and infrastructure, and that places a great responsibility on our industry to make sure that our own negative contribution to climate change is minimized. So that's why ICMM members have a commitment to achieving net-zero Scope 1 and 2 greenhouse gas emissions by 2050 or sooner and to reporting on that progress on an annual basis and setting short- and/or medium-term goals showing how we will get there.

Esther, I think that should be a nonnegotiable for everybody. All mining operations globally should be net-zero Scope 1 and 2 by 2050 or sooner. Not easy, particularly on Scope 1 emissions, where we rely on diesel trucks. And currently, there are no alternatives to diesel trucks available at scale, but we're working really hard with the manufacturers of equipment to fix that.

Secondly, when it comes to the issue of nature, I think everybody needs to adopt the commitment that we will not mine in World Heritage Sites, and we will respect protected areas. That's a commitment we've had for nearly 20 years. But it remains legal to mine in World Heritage Sites. That's extraordinary. And I've been asking governments to make it illegal and pass legislation that prevents mining from happening in those places. And that creates a level playing field and ensures that those places remain off-limits, not just in mining, but frankly, to any activity.

In addition, we, as a mining industry, have a real responsibility and opportunity to contribute to a nature-positive future. And I wrote an open letter to governments just over 3 weeks ago, asking them to commit to an ambitious post-2020 global biodiversity framework with nature positive at its heart because when we do that, it will ensure that not just mining companies, but all operators globally will have to build business models that help the world get to a nature-positive future. And the key date here, of course, is 2030, that from 2030 onwards, we stop and halt and reverse the decline of nature so that by 2050, we have a full restoration of ecosystems. That needs to be an effort that everybody leads. It can't just be our 26 companies, although we certainly are committed to being at the forefront of those.

And maybe -- so I'll just mention one more. There are others too, but climate, nature and one more that I think is really important to the future of our industry is the issue of tailings. Now tailings means essentially mine waste. When we dig up rock from the ground, it has to be crushed and processed. And in the process of that, we generate sand and rock that is not used in the mining process, and that needs to be stored. And now just -- if people are wondering what quantities we're talking here, the amount of metal that's found in the Earth's crust in some parts of the world has been declining. And so we have to mine a lot more to produce the same quantity. In Chile, for example, companies are mining grades of copper that are 0.5% or less, and that's declined over the last 15 years by 30%.

So we need to make sure 2 things: one, that, that waste is managed really responsibly, and we saw the tragic accident at Brumadinho in 2019, where one of those dams that stores the mine waste burst, and that led to the loss of 270 lives. So we need to make sure that those dams are managed really safely because there are over 3,000 dams in operation today.

In addition, we need to make sure that we find ways to mine that reduces the production of those tailings. And so we know -- we use precision mining and other forms of new technologies to reduce the amount of waste rock we produce as we mine because, Esther, we're going to have to produce more copper in the next 20 years than we've produced in the last 100, arguably. And to do that, but do it in a different way so that we produce less waste and we have fewer tailings. That's an issue that perhaps those outside of the mining industry may not be as aware of, but it's a real top priority for us.

Esther Whieldon: So we heard from Rohitesh how ICMM and some of the biggest companies in the mining sector are moving to mine in a more sustainable way. And we heard him say how recycling is already happening for some minerals such as copper and aluminum.

To understand more about how companies are investing in expanding that recycling supply chain for other minerals, let's turn to my interview with Brian of TechMet. I asked him to describe what his company does as well as his assessment of the ability of the metals and mining market to meet the needs of the energy transition.

Brian Menell: TechMet is a private company that invests in and builds projects across the middle portion of the value chain for the critical minerals that go into the energy transition or more specifically, into electric vehicles, batteries, renewable energy systems.

Esther Whieldon: And if I understand correctly, you have investments in both the mining side and the recycling side.

Brian Menell: Yes. We're probably -- in terms of the application of funding that we've deployed over the last few years and hence, underlying value across our 9 operating companies in our portfolio, we're probably approximately 1/3 production, 1/3 processing and 1/3 recycling.

Esther Whieldon: And where are your operations currently or sort of in the works for?

Brian Menell: We're building -- we've got 4 companies in the U.S., both direct lithium extraction from geothermal brines in California, lithium-ion battery recycling in Texas and Ohio, cathode manufacturing technology in Ohio. And we control the biggest vanadium specialty chemicals producer in the U.S. with 2 plants in Arkansas. So that's the U.S., which is 4 out of our 9 operating companies.

We have a nickel cobalt project in Northern Brazil, and we have lithium -- or we're developing lithium chemicals production in Cornwall in the U.K. We have a rare earths interest in a company developing dump treatment for rare earth metals in South Africa, and we have rare earth separation technology company that we're investing in, in Norway. And we have a trading platform. So we have a partnership with Mercuria, one of the biggest energy and commodity trading groups in the world in Geneva, which trades markets and provides supply chain management services for all of our metals, both for our operating companies and for third parties with whom we have marketing relationships and, in some cases, provide debt, too.

Esther Whieldon: So overall, what would you say is your assessment in terms of the ability of the market currently to meet the needs of the energy transition?

Brian Menell: The picture is not a happy one. And as far as our industry being the metals and mining industry really needed to invest $100 billion-plus 3 or 4 years ago in order to adequately scale the supply of the critical minerals going into lithium-ion batteries, electric motors, wind turbines, et cetera, to correctly and adequately feed the energy transition and meet climate change mitigation goals and avoid the cliff of structural short supply for these metals that we are heading to over the next 3, 4 years. So the outlook is very problematic as far as structural short supply, higher prices for longer and serious constraints with respect to the scaling of these key energy transition and climate change mitigation technologies.

Esther Whieldon: What are you doing in terms of and what can the industry do in terms of having to reduce its need for pulling virgin materials from the earth?

Brian Menell: Recycling is a very important part of the equation, and it will be increasingly important as spent batteries, end-of-life batteries are available to come into a recycling pipeline. So our view is that in 10 years' time, up to 25% of battery metals going into new lithium-ion battery manufacturing could be derived from a correctly developed and optimized recycling ecosystem.

Esther Whieldon: So walk me through how much of materials can actually be recovered from batteries.

Brian Menell: A variety of different recycling technologies that are busy being commercialized, but they all recover 85% to 95% of the battery metals in lithium-ion batteries. So you can recover, and you can recover it in a very environmentally friendly, energy-efficient and profitable manner, pretty well everything in a lithium-ion battery in a form that's then reusable for the manufacturing of new batteries. So there are a lot of technical challenges in successfully and profitably recycling lithium-ion batteries. It's not easy. It's not like lead acid batteries that you can recycle in your garage.

However, those technical challenges have largely been solutions have been found to them by not only the companies we have supported, but a number of others. And therefore, it's just a matter of scaling the feed in order to build critical mass and play the role that recycling needs to play in the EV ecosystem.

Esther Whieldon: So when you talk about scaling the feed, what are some of the things that really need to happen to build up that critical mass?

Brian Menell: I think some of it is in the hands of battery manufacturers and auto companies who do need to take responsibility for the batteries that they produce and sell through their full life cycle. And in some jurisdictions, that's legislatively enforced, and that's responsibility on the part of the vendor for the end-of-life cycle disposal or recycling of the systems that they sell. Particularly in Europe, it is enforced. And that needs to probably be more the case elsewhere in the world, including the U.S.

So the regulatory and legislative measures that can be taken to encourage and enforce a recycling ecosystem to maximize the extent to which these materials, metals come back into the supply pipeline.

Some of it's up to industry, some of it's up to recycling industry to build those ecosystems for securing and bringing into their processes the volumes that are available out there.

It's much easier with electric vehicles. Electric vehicles are relatively smaller numbers, and they're controlled or sold by a relatively small number of companies who are big, sophisticated companies who know where all the cars that they sell are and generally speaking, knows what happens to them. Much more complicated with smartphones and tablets and laptops and home power appliances, all of which are a very important part of the feed we need to bring into this industry in order to make as much of a contribution as we could make. And that's something that's local, city government, federal government, industry need to work together in order to make sure it's more and more successful.

Esther Whieldon: Brian also discussed what other challenges the mining industry faces.

Brian Menell: There's a desperate need for more finance. Bank of America did a study a few months ago, the result of which that they defined or suggested that over the last 4 years, the average annual investment in new project development for the mining industry as a whole, globally, so this is mining everything, was about $80 billion a year. And they estimate that in order to adequately produce what the energy transition needs over and above what is being produced today, will require a further $80 billion a year over and above that background, $80 billion every year for the next 7 or 8 years in order to catch up and create adequate supply.

So there's massive need for radically high levels of investment and capital investment in mining and metal processing and recycling. It's not being done by the global mining majors like Rio Tinto, BHP or Anglo American largely, even though they're looking at it and starting to do a bit more, because most of these metals have been too small projects and too smaller markets to move the dial for them.

The big sources of financing, climate change impact investing, ESG funds, which should be looking at this because you can't have a successful energy transition without a successful mining and metals industry, and they should be looking at it because they should take the time and make the effort to understand that mining and metals can be ESG compliant and sustainable and low environmental impact and responsible socially and therefore is worthy of support, even if you didn't have to have it in order to mitigate climate change, but they're generally not. So our industry has been relatively starved of capital, certainly relative to what should be deployed and what needs to be deployed in order to do what we need to do for a clean, sustainable world that we all want.

The other challenge that we need government, both federal state and local, to deal with much better than they have in the past is the facilitation of a regulatory licensing regime that is efficient. Nobody -- well, certainly not us and nobody in the Western world wants to drop standards with respect to environmental and social impact, but we do want a fair, transparent process that can be executed quickly because we do have to build more mines in America and elsewhere in friendly countries, and we do have to build more metal processing and handling capacity in the U.S. and in friendly countries. And to do that successfully and fund it successfully, you need to be able to license it successfully.

Esther Whieldon: In this episode, we heard both Brian and Rohitesh indicate they would like to see reforms to mining permitting processes. I asked Rohitesh how governments can make those changes without hindering the ability of those processes to ensure the impact of the proposed project on nature is minimized. Here's his answer.

Rohitesh Dhawan: Look, we should never do anything to change the permitting and siting process that has the effect of shortchanging the welfare of communities that are affected by mining or the critical environment in which mining operates. Just as we would never mine in a way that was unsafe, we should never be mining in a way that reduces the protections for people or for the environment. That has to be an unequivocal commitment from everyone who mines. It certainly is the commitment of the 26 companies at ICMM.

But there are still things we can do that allow us to reduce the permitting times and make it more efficient without compromising quality. So I would estimate that over the course of a project, a developer has to comply with something like 5,000 different permitting obligations. Many of those are fit for purpose in their current form, but I can guarantee you that there are many of those that can be collapsed, merged and looked at differently so that the outcome is still what it's intended to be, but you don't have to go through each single step as it's currently laid out.

And that's why we, as ICMM, in writing our mining principles, have written them as principles. What we have said is here is the outcome that you absolutely need to strive for and achieve, and here's the very robust disclosure requirement you need to have to demonstrate to people that you've done the outcome you were seeking. But what we don't do is become intensely prescriptive about exactly the steps you need to follow to get there because the steps you need to follow to get there will vary depending on the type of project and the location of that project.

So if we were to build a list that would cover every eventuality in every country, that list becomes enormous. And I fear that, that's some of what's driven some permitting and licensing regimes where it's tried to cover every possible eventuality in every scenario, and the result is going through the motions on a number of things that really take up a lot of time but have no discernible impact on the quality of the outcome.

So we should never ever compromise on the quality of the consultation or the quality of the work that's done to ensure that harm is minimized and benefit is maximized, but we should absolutely take a fresh look at how that's being done so that we can shortcut time lines and bring more production onstream so that the world's net-zero goals aren't in jeopardy as a result of the shortage of these metals and minerals.

Esther Whieldon: Okay. Now let's turn to my conversation with Raquel Dominguez of Earthworks, who is tracking the minerals recycling issue closely. Here she is explaining her role at Earthworks and how a circular economy could help with lowering the impact of mining on nature and local communities.

Raquel Dominguez: At Earthworks, I work on circular economy policies, mostly at the federal level in the United States and mostly geared towards administrative activities. And that means that I am basically advocating for 2 overlapping sets of policies: one in the more short-term sense, which is reusing, recycling and substituting minerals that have already been extracted; and in a longer-term sense, reducing mineral demand in order to reduce the amount of extraction necessary.

Esther Whieldon: So when it comes to the low carbon transition, research has shown that significantly more of certain minerals will be needed for technologies such as renewables and electric vehicles. Can you tell me what challenges this might pose for nature and biodiversity?

Raquel Dominguez: So I want to push back on the assumption that those demand projections are 100% guaranteed to happen. That research assumes that for every internal combustion engine vehicle, there will be an electric vehicle on a 1:1 ratio. That is generally speaking, why those demand projections are so staggeringly high. That same research also assumes few, if any, circular economy policies, which can include, but are certainly not limited to, designing for circularity, recycling, reuse substitution, refurbishment, et cetera.

Also mining, according to the UN Environment Programme, produces 10% of all greenhouse gas emissions. So expanding mining is the opposite of a climate solution, especially if it's done without the consent or even consultation of nearby communities. Mining removes huge amounts of water from the hydrological cycle permanently. And to rely on it as the U.S. West is running out of water is also not a climate solution. It's also worth noting that mining is a huge threat to biodiversity, which is obviously getting dangerously low.

Esther Whieldon: And can you just, for our listeners real quick, kind of define -- and we've talked about it, we've touched on it before in this podcast. But can you, in just a few sentences, define what the idea of a circular economy is?

Raquel Dominguez: So the global economy currently operates under a linear model, which is predicated on 3 main things: take, make and waste. Under a linear economy, the extraction, the take part, is constantly increasing because everything is designed for one use before being put into the waste category. So a fossil fuel economy is, by definition, a linear economy because you can't reuse fossil fuels.

So the inverse of a linear economy is a circular economy in which extraction and waste are both minimized as much as possible. And things stay in use for as long as possible through policies like designing for circularity, recycling, refurbishment, right to repair, things like that.

So I work on circular economy policies from a mineral standpoint because Earthworks tries to protect communities on the front lines of mineral extraction. That means that I'm advocating for policies in which minerals that are already extracted are recycled, reused and substituted. And in a longer-term sense, we reduce the demand for minerals so we reduce extraction.

Esther Whieldon: Thank you. So what are the strategies then that can be taken that mining sector or other companies involved in the low carbon transition can do to reduce that impact on biodiversity and ecosystems, things like the circular economy that you've talked about?

Raquel Dominguez: Honestly, the best thing that mining companies can do is actually seek the free prior and informed consent of mining-affected communities. And by the way, consent seeking is an ongoing dynamic process that can be paused or stopped at any point. It's not something that you achieve once and then move forward without any backwards glances.

A second thing, and this is particularly relevant to the United States right now, is you should not be advocating for streamlining permitting processes or otherwise undermining bedrock environmental laws. Those exist for a reason, and the reason is to protect communities and the natural resources they and all of us depend on.

Esther Whieldon: So if you could wave a magic wand, what would a sustainable circular economy look like for the energy transition? What would you need to see from the public, from policymakers and companies?

Raquel Dominguez: Oh, my gosh, that's a really good question. So in the grander sense, a circular economy is one in which extraction is not assumed. And all of the policies that form that economy model, they prioritize reuse, substitution, repair, refurbishment, designing for circularity, et cetera, over extraction. So extraction is intentionally, consciously and actively minimized at every step in the process of designing a product or designing something that will be used.

In a mineral-specific sense, a circular economy has to reduce demand for minerals, which in the United States, which has the most cars per capita of any country, that means reducing car dependency by massively expanding public transit as well as biking and walking infrastructure, densifying cities, increasing green space, et cetera. Basically, we need -- we and the Global North, and particularly in the United States, need to fundamentally change how we get around our cities and how we transport ourselves across the world.

More specifically, this means establishing policies that make returning minerals to their resource loops easy and accessible, including requiring design for circularity, extended producer responsibility for original equipment manufacturers like cars; second, third and even more life use, ensuring all product users have the right and ability to repair their products; promoting battery and mineral science to further substitution policies; and ensuring that recycling, when necessary, is done in a safe, equitable way.

Esther Whieldon: So since you've been tracking this topic pretty closely, how far along would you say is the circular economy awareness and discussion when it comes to minerals in the United States?

Raquel Dominguez: So in the United States, it's -- as I'm sure you're aware, a pretty specific political context, we are a very -- for better or for worse, we're a very capitalist economy. We're a very consumer-based economy. And a lot of people are really convinced that those paradigms are very natural and normal. And so I would say the conversation about circularity is very much filtered through the assumption that it is impossible and unnatural, which makes the conversation difficult, of course. But I think that's why it's so important.

Esther Whieldon: So as you can hear, Lindsey, our guests gave us a lot to think about in terms of recycling minerals for the low carbon transition. We heard from our guests about the challenges ahead for scaling up recycling of minerals such as lithium and how some companies are already investing in those recycling technologies.

Lindsey Hall: And we heard from Raquel from Earthworks, suggesting that the world can reduce its need for critical minerals for electric vehicles by investing in public transport infrastructure, which would result in less electric vehicles being needed on the road overall.

Esther Whieldon: Please stay tuned for our upcoming coverage of COP15 on this podcast.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider, and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.



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