Decarbonising critical minerals: addressing challenges and driving industry change

Critical minerals such as lithium, copper, nickel, cobalt and rare earth elements are essential to a low-carbon future. They form key components of renewable energy technologies such as wind turbines and solar panels, as well as electric vehicle batteries and more. As the demand for green energy accelerates, as does the demand for critical minerals. Paradoxically, their extraction, processing and refining is carbon intensive. This poses the question – how can we cut emissions without compromising supply? 

We explored this paradox and innovative strategies to overcome it in a recent Innovation Forum webinar, featuring expert insights from:

Discussion led by Innovation Forum’s Ian Welsh, the conversation focused on the practical pathways for reducing emissions, leveraging renewable energy, and the commercial imperatives driving decarbonisation. Below is a summary of the key takeaways.

“Decarbonising critical minerals is not an easy task for 3 main reasons: their production is inherently energy intensive, deposits are located in remote areas with limited access to renewable energy, and the commodity market is volatile.” - Reza Rahmaditio, World Resources Institute. 

Whilst efforts to decarbonise the critical minerals supply chain are clear, the industry faces several hurdles. Mining critical minerals is energy-intensive, as there is often a low percentage of the valuable element within the ore. For example, in lithium ore there is typically only 5% extractable lithium inside. Thorough processing is needed at high temperatures to extract valuable elements. This processing is historically reliant on fossil fuel resources, particularly as many critical mineral deposits such as nickel in Indonesia are found in remote locations, disconnected from renewable energy opportunities. As well as this, price volatility of minerals puts added pressure on producers to finance decarbonisation. 

Reza also discussed potential solutions such as energy efficiency improvements, waste heat recovery, and emerging technologies like hydrometallurgical processing, where water is used to extract metals from the ground, eliminating the need for high-temperature processes like smelting, which are major sources of CO2 emissions.

Creating a clear decarbonisation roadmap is crucial to meeting ambitious reductions targets. Urishanie Govender outlined the company’s commitment to installing 583 MW of renewable energy capacity by 2045, alongside interim targets of reducing CO2 emissions by 20%, 40% and 60% by 2026, 2031 and 2036 respectively. 

Similarly, Arend shared the company’s roadmap toward net zero emissions by 2050, with an interim 14% emissions reduction target by 2035. Arend also discussed the importance of adherence to responsible mining certifications, such as the Initiative for Responsible Mining Assurance (IRMA) standards, to support decarbonisation efforts. Internationally recognized standards like this can help build trust with stakeholders and position sustainably produced minerals as market differentiators in the future. 

“Decarbonising critical minerals not only enhances our environmental stewardship, but allows us to address cost elements, access to capital, market differentiation, regulatory compliance as well as social licence to operate” Dr. Urishanie Govender, Harmony Gold Mining Company.

Powering mineral extraction with renewable energy can lead to significant cumulative cost savings, and preferred access to capital. Evidence of CO2 emissions reduction is a prerequisite to some green bonds and qualifies businesses for lower interest rates. As well as this, social licence to operate is crucial to the success of mining companies. It goes without saying that the reputation of the mining industry will influence its ability to meet demand. Having a robust sustainability framework, which includes ambitious targets and measurable emissions reductions, positions mining companies as the partner of choice for local government and communities. 

“There is not one magic bullet to reduce our dependency on coal, so we have to look at a mix.” - Arend Van Der Goes, Eramet.

With each of the methods used for reducing dependency on coal-fired power plants, there are trade-offs. For example, reliance on solar power significantly reduces a mining company’s carbon footprint, but solar panels require large amounts of space. This is a particular challenge when operating in an area of critical habitat, where critical minerals sites are often located. To balance these trade-offs, diversifying sources of renewable energy could be the way forward.

In Indonesia, locations of renewable energy potential are located far from regions of demand. This is not supported by the electricity grid infrastructure. Reza emphasised the importance of taking critical minerals sustainability into consideration in the planning of infrastructural development- it's not enough for the processing facilities to be close to reserves and deposits, they must also have access to hydro, wind and solar energy resources to improve their accessibility to low carbon operations. 

The panelists agreed that while new technologies show promise, pragmatic, risk-based adoption of proven renewable solutions remains critical in the near term.

The webinar highlighted that decarbonising critical minerals is complex but that progress is achievable through collaborative innovation, strategic investment, and commitment to sustainability.

To continue the conversation and dive deeper, join us for the Critical Minerals Innovation Forum,taking place in London on 5th-6th November This two-day business conference connects the full critical mineral value chain from mining, processing and refining to automotive, electronics and renewables. Industry leaders and experts will further explore these vital themes and drive forward the transition to a low-carbon minerals sector. Click here for information on how to get involved.