As mining companies strive to rapidly decarbonise, many will have already begun implementing some of the core principles of the circular economy without knowing it.
For example, mining standards such as the World Bank’s Climate-Smart Mining Initiative seek to cut the carbon footprint of the mining industry by reducing waste and limiting emissions. These steps are necessary to keep temperatures below the two degrees laid out in the Paris Agreement, while enabling the extraction of the necessary resources for the world’s transition to clean energy.
But to truly harness the potential of the circular economy, mining companies must move beyond this incremental approach to reshape their entire business models. Upending traditional approaches and experimenting with innovative solutions will allow them to reap the full financial, social, and environmental benefits of going circular.
Businesses should commit to the circular economy as early as possible.
Transformational change entails that a business completely rethinks its strategy, adopts totally new technologies, and/or serves brand new markets. This is a difficult and highly complex undertaking which requires immense behavioural and cultural change – but the potential rewards are far beyond that of gradual, piecemeal changes.
In the mining industry, transformational change requires moving beyond a view of the mine as a separate, siloed institution, stepping back to see where it exists in the local landscape and broader sector, and asking how value can be shared between multiple stakeholders who mutually benefit.
Rather than changing course while a mine is active, companies should commit to fully embracing the circular economy at the initial design stage. This will produce the best returns, both in terms of generating value and setting the mine in good stead for environmental approvals. At this stage, the methods I’ve laid out in the previous article for how mines can go circular should be considered, with a circular approach to all facets of the mine – from the equipment that will be used, to what will happen after the mine’s closure.
Collaboration as a tool for transformation.
A circular economy requires a whole system approach, wherein businesses step back from their goal of extracting and producing only one kind of material, and see themselves as part of a larger network. On this view, by-products that were previously considered undesirable are instead seen as potential sources of value and treated as such. When mining operators collaborate with other businesses, their value can be unlocked.
Through industrial symbiosis, mining companies can work together with other stakeholders to their mutual benefit. To achieve this, expansion should happen outwards, beginning with partnerships with other companies in the sector who produce different materials. As well as pooling their resources in this way – where one company’s trash is another’s treasure – businesses can also work together to share equipment, training, or developing new technology.
Mining companies should then investigate opportunities to collaborate with downstream players, and those in the local area, as this is where the biggest opportunities lie. Here, there are opportunities in working with other industries – such as cement and construction – who can make use of waste that was previously considered inevitable. Ultimately, the end goal is to collaborate on all aspects of production, processing, and manufacturing, so that all of the available material is optimised.
Collaboration with local stakeholders is also key when envisioning the mine’s future after closure. This involves conversations with local businesses, Indigenous rights holders, and regional planners. Again, it’s crucial that the groundwork for these partnerships is laid at the initial conception phases of the mine. At this point, bringing various stakeholders together to plan and collaborate can help ensure the most value is created for everyone, both through materials and in bringing social and environmental benefits, while creating new opportunities for knowledge sharing.
The business benefits of circular collaboration.
Collaborating with both upstream and downstream stakeholders incites mutual benefits, beyond maximising the value of mined resources. The risk of volatile prices is mitigated, the security of supply chains is improved, resilient jobs are created, and risks associated with investments in innovation are decreased. Meanwhile, collaborating to achieve a circular business model will allow a mining company to position itself as a leader in innovation and social responsibility.
By sharing equipment and resources, companies will have less waste they need to handle and transport, lowering their greenhouse gas emissions and operational costs, and reducing the risks they are liable for managing. While demonstrating their commitment to working sustainably and responsibly, a mining operator’s reputation and responsibility rating is improved, meaning they are more likely to be able to operate given the benefits that are returned to the community in the long term.
Lower costs and higher demand.
The operation costs at the initial stages of a circular mine may be higher than one which follows a traditional linear approach. But by harnessing the maximum value from all materials, lowering operational costs, and ensuring that equipment lasts longer, these costs are balanced out in the long term – to say nothing of their non-financial returns on lowering emissions and protecting the environment.
As consumer demand for sustainability continues to rise, many large consumer-facing manufacturers and raw materials buyers are seeking to buy materials from operators with a reputation for social responsibility and commitment to delivering low carbon products. Impact investors who are keen to see positive social or environmental returns on their money will also be attracted to circular mines, while others are introducing mandatory ESG standards.
By shifting to a circular approach, mining companies can therefore build resilience and bring about financial benefits that aren’t possible for those that remain linear, while doing their part to protect the natural world and its biodiversity.