COP26, North American Leaders Summit Boost Mining
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COP26, North American Leaders Summit Boost Mining

Photo by:   omid roshan, Unsplash
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Paloma Duran By Paloma Duran | Journalist and Industry Analyst - Wed, 12/29/2021 - 11:22

The commitments made at COP26 and the North America Leaders’ Summit (NALS) are expected to have a significant impact on mining. While COP26 pushed for carbon removal and green energies, NALS pledged to act against climate change. Mining is expected to be further promoted in the coming years, as minerals are key to achieving these new goals.

“The energy transition starts and ends with metals. If you want to generate, transmit or store low and no-carbon energy, you need aluminum, cobalt, copper, nickel and lithium. More mining is needed in the world,” said Julian Kettle, Vice Chairman of Metals and Mining, Wood Mackenzie.

The principal commitments of the Glasgow Climate Pact, signed by almost 200 countries, include reducing coal generation and accelerating plans in the fight against climate change. Latin America, being a key producer of minerals necessary for renewable energy, battery storage and electric vehicles, will be one of the regions that will benefit the most from the increasing demand, reported BNamericas.


Among the countries that will benefit the most are Chile and Peru, two of the world’s largest copper producers. Argentina and Chile have also benefitted from being pioneers in global lithium production. Brazil, the world's third largest producer of bauxite and alumina in 2020 and a major supplier of nickel, will benefit from these agreements, along with the Dominican Republic and Cuba. Mexico, meanwhile, will play a key role, as it is the world's largest producer of silver, which is used in photovoltaic cells.

Country participants agreed to gradually reduce carbon use and implement a global carbon emissions market, which will raise the cost of using fossil fuels. "The COP26 agreement establishes a route for the next few years aimed at reducing fossil fuels and toward more expansive carbon pricing mechanisms," said Kieran Clancy, Commodity Specialist, Capital Economics.

Signatories discussed the change in market dynamics since the demand for certain metals like copper could increase by limiting global warming to 1.5ºC. "The supply gap represented by the uncommitted proportion of the potential 2030 market represents a major opportunity for investment, with the associated tonnages being truly transformational when set in the context of current market size," said Kettle.



Regarding Mexico’s potential, several experts have agreed that the country has an important role in the decarbonization of the world since it is the world´s largest producer of silver, considered one of the minerals that is mostly used for green technologies. “The future looks bright for silver’s industrial demand in green applications, such as solar power and electric vehicles. Mexico as the main producer of silver will be greatly benefit,” said Bradford Cooke, Founder and Executive Chairman, Endeavour Silver.

Furthermore, on Nov. 18th, for the first time since 2016, the leaders of North America met in Washington to discuss the opportunities and challenges the region is currently facing. In NALS, where US President Joe Biden, Canadiab Primer Minister Justin Trudeau and Mexican president López Obrador participated, there were no discussions specifically about mining. However, the three countries pledged to create a North American Strategy on Methane and Black Carbon to reduce methane emissions, increase climate ambition, accelerate the transition to renewable energy and sustainable transportation and make states and cities key contributors to accelerating climate action, reported the US Department of Energy. 


US Secretary of Energy Jennifer M. Granholm said the most important commitment was to fight climate change as “it poses a threat to our economies and our communities, especially those that are vulnerable and underserved. It also presents a tremendous opportunity to build back better, to create well-paying and reliable jobs in ever-growing markets and to position North America as a global leader in clean solutions.”

As the world moves toward a greener future, experts believe the demand dynamics of the mining industry will be significantly altered. “Increasing the generation of renewable energy will increase the need for nickel, cobalt, lithium, heavy rare earths and copper. It heralds new opportunities for miners and will reshape mining portfolios for years to come," Deloitte explained.


Mexico, being one of the main world producers of minerals such as silver and copper, in addition to having potential with the new white gold, lithium, is expected to face greater demand. However, according to experts there are challenges ahead the country needs to face. Internationally, there are doubts that the mining industry can manage to supply the necessary metals to reach net zero by 2050, as most commodities are in poor health and could not withstand greater demands, explained Kettle. The will and capacity of the mining industry to allocate better investments, in addition to changing its attitude to risk, will be key to achieving green objectives. “I believe we can achieve the improbable, by convincing policy makers and investors of their vital role in making the green transition happen,” said Kettle.

Photo by:   omid roshan, Unsplash

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